HomeMy WebLinkAbout2010-06-02 PacketCITY OF UKIAH
CITY COUNCIL AGENDA
Special Meeting
CIVIC CENTER COUNCIL CHAMBERS
300 Seminary Avenue
Ukiah, CA 95482
June 2, 2010
5:00 P.M.
Note: Items not reviewed/concluded during the Special meeting will be taken up
during the course of the Regular City Council Meeting beginning at 6:00 p.m.
Staff reports for these items will all be available with the Regular Agenda.
1. ROLL CALL
2. ACTION ITEMS/UN FINISH ED BUSINESS
a. Discussion and Possible Direction to Staff Regarding Mobilehome Rent Stabilization
Ordinance (see Regular Agenda Item 10a)
b. Administrative Cost Estimates Related To Implementation of a Rent Control Ordinance
Consistent with Options Outlined by City Attorney (see Regular Agenda item 10b)
C. Award Bid For The Construction Of The Ukiah Skate Park To Geocon Engineering, Inc. In
The Amount Of $666,320.24 And Approval Of Corresponding Budget Amendments (see
Regular Agenda Item 10c)
3. ADJOURNMENT
Please be advised that the City needs to be notified 72 hours in advance of a meeting if any specific
accommodations or interpreter services are needed in order for you to attend. The City complies with ADA
requirements and will attempt to reasonably accommodate individuals with disabilities upon request.
Materials related to an item on this Agenda submitted to the City Council after distribution of the agenda packet are
available for public inspection at the front counter at the Ukiah Civic Center, 300 Seminary Avenue, Ukiah, CA
95482, during normal business hours, Monday through Friday, 8:00 am to 5:00 pm.
I hereby certify under penalty of perjury under the laws of the State of California that the foregoing agenda was
posted on the bulletin board at the main entrance of the City of Ukiah City Hall, located at 300 Seminary Avenue,
Ukiah, California, not less than 24 hours prior to the meeting set forth on this agenda.
Dated this 28th day of May, 2010.
Linda Brown, Acting City Clerk
1. ROLL CALL
2. PLEDGE OF ALLEGIANCE
3. PROCLAMATIONS/INTRODUCTIONS/PRESENTATIONS
a. Presentation of City of Ukiah Market and Portfolio Review by Nancy Jones, PFM Asset
Management LLC
b. Proclamation: Ridgewood Masonic Lodge #146
4. PETITIONS AND COMMUNICATIONS
5. APPROVAL OF MINUTES
6. RIGHT TO APPEAL DECISION
Persons who are dissatisfied with a decision of the City Council may have the right to a review of that decision by a court.
The City has adopted Section 1094.6 of the California Code of Civil Procedure, which generally limits to ninety days (90)
the time within which the decision of the City Boards and Agencies may be judicially challenged.
7. CONSENT CALENDAR
The following items listed are considered routine and will be enacted by a single motion and roll call vote by the City
Council. Items may be removed from the Consent Calendar upon request of a Councilmember or a citizen in which event
the item will be considered at the completion of all other items on the agenda. The motion by the City Council on the
Consent Calendar will approve and make findings in accordance with Administrative Staff and/or Planning Commission
recommendations.
a. Notification of Purchase of Diesel Engine Repair Services From Opperman And Son Inc., In
The Amount Of $5,983.76
b. Notification Of Purchase Of Firefighter Protective Clothing (Turnouts) From L.N. Curtis In
The Amount Of $6,486.56.
C. Authorization Of Sole Source Purchase Of Stryker Power Pro Ambulance Gurney From
Stryker Inc., In The Amount Not To Exceed $14,600.00.
d. Notification Of Sole Source Purchase Of A Narcotic Detecting Dog, In The Amount Of
$8,893.75, From Master K-9 Inc.
e. Update Report Regarding Status Of Water Emergency Conditions Necessitating
Emergency Resolution To Expedite Construction Of Oak Manor Drive Water Well
f. Adoption Of Resolution Requesting The Board Of Supervisors Of The County Of
Mendocino To Request The County Clerk To Conduct The Municipal Election Of
The City Of Ukiah On Tuesday, November 2, 2010, And To Consolidate Said Election With
The Statewide General Election Held On The Same Date Pursuant To §10403 Of The
Elections Code.
g. Award Purchase Of Granicus Meeting Efficiency Suite In The Amount Of $10,590.00.
h. Notification To City Council Of The Purchase Of Toxicity Testing Services For The
Wastewater Treatment Plant To Pacific EcoRisk For A Total Not To Exceed $5385.00
i. Authorize The City Manager To Negotiate And Execute A 36 Month Lease And
Maintenance Agreement With Toshiba Business Solutions For Four Multi-Function Copy
Machines.
j. Adoption Of Resolution Approving An Application For Proposition 84 Nature Education
Facilities Competitive Grant Funds For Grace Hudson Museum & Park.
k. Authorize The Repair Of Electric Utility Truck #2121 Be Increased In The Amount Of
$3331.14 For A Total Of$22,331.14. (EUD)
1. Approval Of Notice Of Completion For The Distribution Pole Replacement Project,
Specification No. 09-11 And Approval Of Final Payment Of The 10% Retention To
Par Electrical Contractors. (EUD)
M. Mendocino Solid Waste Management Authority (MSMWA) Annual Report, Budget Review
Of Fiscal 2009/2010, And Proposed Budget For Fiscal 2010/2011
n. Authorization For City Manager To Negotiate And Execute An Update To The
Memorandum Of Understanding Between City Of Ukiah And Ukiah Unified
School District
o. Update Report On Local Emergency Declaration Regarding Drought And Water Shortage
Status
P. Status Report On Riverside Park Development Project Funded By California Resources
Agency River Parkways Grant
8. AUDIENCE COMMENTS O NON-AGENDA ITEMS
The City Council welcomes input from the audience. If there is a matter of business on the agenda that you are
interested in, you may address the Council when this matter is considered. If you wish to speak on a matter that is not
on this agenda, you may do so at this time. In order for everyone to be heard, please limit your comments to three (3)
minutes per person and not more than ten (10) minutes per subject. The Brown Act regulations do not allow action to be
taken on audience comments in which the subject is not listed on the agenda.
9. PUBLIC HEARINGS (6:15 PM)
10. UNFINISHED BUSINESS
a. Discussion and Possible Direction to Staff Regarding Mobilehome Rent Stabilization
Ordinance
b. Administrative Cost Estimates Related To Implementation of a Rent Control Ordinance
Consistent with Options Outlined by City Attorney
C. Award Bid For The Construction Of The Ukiah Skate Park To Geocon Engineering, Inc. In
The Amount Of $666,320.24 And Approval Of Corresponding Budget Amendments
d. Consideration And Adoption Of Revisions To The Investment Policy Of The City Of Ukiah
e. Adoption Of Policy Establishing Advances Made From The Sewer Operating Revenue To
The Sewer Connection Fee Fund Are Loans And Are Intended To Be Repaid From Future
Connection Fees.
f. No. 7 Budget Workshop: Options to Offset Deficit Spending (oral presentation)
11. NEW BUSINESS
a. Review Of Edward Byrne Memorial Justice Assistance Grant (JAG) Formula Grant
FY 2010/2011 Application
b. Approve Plans And Specifications No. 10-07 For Electrical Installation Of Musco Sports
Cluster Green System And Site Utility Infrastructure At Anton Stadium.
C. Consideration Of A Revolving Loan Program To Provide Gap Financing To Small
Businesses Utilizing Community Development Block Grant (CDBG) Program Income
12. COUNCIL REPORTS
13. CITY MANAGER/CITY CLERK REPORTS
14. CLOSED SESSION - Closed Session may be held at any time during the meeting
a. Conference with Legal Counsel - Anticipated Litigation
Government Code Section 54956.9(b)(1) - Significant exposure to litigation (1 case)
b. Conference with Real Property Negotiators (§54956.8)
Property: APN # 003-062-05
Negotiator: Jane Chambers, City Manager
Negotiating Parties: City of Ukiah and Ukiah Unified School District
Under Negotiation: Price & Terms
15. ADJOURNMENT
Please be advised that the City needs to be notified 72 hours in advance of a meeting if any specific
accommodations or interpreter services are needed in order for you to attend. The City complies with ADA
requirements and will attempt to reasonably accommodate individuals with disabilities upon request.
Materials related to an item on this Agenda submitted to the City Council after distribution of the agenda packet are
available for public inspection at the front counter at the Ukiah Civic Center, 300 Seminary Avenue, Ukiah, CA
95482, during normal business hours, Monday through Friday, 7:30 am to 5:00 pm.
I hereby certify under penalty of perjury under the laws of the State of California that the foregoing agenda was
posted on the bulletin board at the main entrance of the City of Ukiah City Hall, located at 300 Seminary Avenue,
Ukiah, California, not less than 72 hours prior to the meeting set forth on this agenda.
Dated this 28th day of May, 2010.
Linda Brown, Acting City Clerk
3b
PROCLAMATICIJ
FOR
RIDGEWOOD MASONIC LODGE NO. 146
FREE & ACCEPTED MASONS of the STATE of
CALIFORNIA
WHEREAS, the Ridgewood Masonic Lodge has served as a
beneficial and beneficent local organization for the past 150 years, and
WHEREAS, the Lodges of Willits, Covelo and Ukiah have combined to
provide a positive and productive Masonic Influence in Mendocino County for over
380 years, and
WHEREAS, the efforts of countless Masons have supported the concept and
performance of individuals being parts of numerous other organizations that do
good things and serve others well, and
WHEREAS, Ridgewood Masonic Lodge No. 146 and several other Masonic
Organizations have contributed to support perpetuity of the beautiful and scenic
surroundings of the area.
NOW, THEREFORE, I, Benj Thomas, Mayor of the City of Ukiah, on behalf of
City Councilmembers, Mari Rodin, Philip Baldwin, Douglas Crane and Mary Anne
Landis, celebrate the efforts of
RIDGEWOOD MASONIC LODGE NO. 146
and call upon the people of Ukiah to enjoy the benefits of our continued Masonic
Service and Fraternal Friendship.
Signed and sealed, this 2nd day of June, in the year Two Thousand and Ten.
Benj 77comm,.+1gyor
ITEM O.: 7a
MEETING DATE: June 2, 2010
AGENDA SUMMARY REPORT
SUBJECT: NOTIFICATION OF PURCHASE OF DIESEL ENGINE REPAIR SERVICES
FROM OPPER AN AND SON INC., IN THE AMOUNT OF $5,983.76.
Background:
The Ukiah Fire Department's fire engines are equipped with Detroit Diesel engines. When complex engine
repairs are required, the department utilizes Opperman and Son Inc., located in Healdsburg, for repair
services. Opperman and Sons Inc., is the closest factory certified Detroit Diesel repair shop, utilizing
advanced computerized Detroit Diesel analytical software and diagnostic tools.
Discussion:
In April of this year, staff discovered that the engine oil in Fire Engine 6580 had been contaminated with
diesel fuel. This condition, if left unresolved, can cause major damage to the diesel engine. Unable to
determine the exact cause of the contamination, our city mechanics transported the vehicle to Opperman for
service.
Through diagnostic testing, Opperman determined that the diesel engine injectors were leaking fuel into the
crank case of the engine which created contamination of the oil. Staff authorized the replacement of the
vehicle's injectors to repair the engine at a cost of $5,983.76.
Fire Engine 6580 is a 2001 model, with approximately 31,750 miles. Engine 6580 is scheduled to remain in
service in the fire department fleet until 2021.
In compliance with Section 1522 of the Ukiah City Code, this report is being submitted to the City Council for
the purpose of reporting an acquisition costing $5,000 or more, but less than $10,000.
Fiscal Impact:
Budgeted FY 08/09 1-1 New Appropriation Not Applicable Budget Amendment Required
Amount Budgeted Source of Funds (title and Account Number Addtl. Appropriation Requested
$5,983.76 Fire Apparatus (repair and maintenance) 105.2101.303.001 None
Continued on Page 2
Recommended Action(s): No action required; notification of purchase of diesel engine repair services
from Opperman and Son Inc., in the amount of $5,983.76, from account 105.2101.303.001.
Alternative Council Option(s): N/A
Citizens advised:
Requested by: Chris Dewey, Director of Public Safety
Prepared by: Chris Dewey, Director of Public Safety
Coordinated with: Jane Chambers, City Manager
Attachments:
Approved:
J Chambers, City Manager
City A-frakiah
ITEM NO.: 7b
MEETING DATE: June 2, 2010
AGENDA SUMMARY REPORT
SUBJECT: NOTIFICATION OF PURCHASE OF FIREFIGHTER PROTECTIVE CLOTHING
(TURNOUTS) FROM L.N. CURTIS IN THE AMOUNT OF $6,486.56.
Background:
The Ukiah Fire Department has an established yearly inspection
Protective Clothing (Turnouts). Turnouts protect firefighters from
hazardous conditions in hazardous situations. Turnouts are required
firefighters to perform their duties.
Discussion:
and replacement plan for Firefighter
extreme temperatures and other
safety equipment by Cal-OSHA for
Included in the FY 09/2010 Fire Budget is the replacement of Firefighter Protective Clothing. Through the
annual inspection and replacement program, staff determined that four new sets of turnouts were needed to
be replaced for the department's volunteer firefighters.
Previously, the department selected the Globe brand of turnouts, and has standardized firefighter protective
clothing and safety gear to ensure all personnel are properly trained in all aspects of using this safety
equipment in hazardous environments. The Globe brand meets the strict specifications of the National Fire
Protection Association, Cal-OSHA and the Ukiah Fire Department. L.N. Curtis is the exclusive vendor for
the Globe brand of turnouts in our region.
In May of this year, Staff purchased four new sets (jackets and pants) of turnouts from L.N. Curtis in the
amount of $6,486.56, from Volunteer Firefighter Budget account 105.2190.690.002.
In compliance with Section 1522 of the Ukiah City Code, this report is being submitted to the City Council for
the purpose of reporting an acquisition costing $5,000 or more, but less than $10,000.
Fiscal Impact:
❑X Budgeted FY 08/09 1-1 New Appropriation Not Applicable Budget Amendment Required
Amount Budgeted Source of Funds (title and Account Number Addtl. Appropriation Requested
$6,486.56 Machinery and Equipment 105.2101.800.000 None
Recommended Action(s): No action required; notification of purchase of turnouts from L.N. Curtis, in
the amount of $6,486.56, from account 105.2190.690.002.
Alternative Council Option(s): N/A
Citizens advised:
Requested by: Chris Dewey, Director of Public Safety
Prepared by: Chris Dewey, Director of Public Safety
Coordinated with: Jane Chambers, City Manager
Attachments:
Approved: _~;A, 6~~
Ja Chambers, City Manager
7c
June 2, 2010
SUBJECT: AUTHORIZATION OF SOLE SOURCE PURCHASE OF STRYKER POWER PRO
AMBULANCE GURNEY FROM STRYKER INC., IN THE AMOUNT NOT TO
EXCEED $14,600.00.
Background: The Ukiah Fire Department maintains 3 operational ambulances within its fleet. Because
each gurney manufacturer requires a vendor specific mounting and securing system to hold a gurney in
place while in transit, the department has standardized all three ambulances with the Stryker brand of
ambulance gurneys. Standardized medical gurneys ensure all personnel are properly trained in all aspects
of using this equipment in emergency situations, and that the equipment is interchangeable between the
ambulances in our fleet.
Discussion: Included in the FY 09/2010 Fire Budget is funding for EMS operational supplies and
equipment. Through the department's annual inspection and replacement program, staff determined that
one of the department's gurneys is beyond its serviceable life and must be replaced.
Since 2008, department staff has experienced 15 injuries as a result of lifting medical patients in manual
gurneys. These injuries are a result of lifting larger patients. Over the same time period since 2008, the
department transported an average of one patient over 500 Ibs, each month.
Because of the frequent lifting injuries associated with the manual gurneys, staff evaluated both a manual
gurney and a newer style of power assisted gurneys in actual medical response incidents. Powered gurneys
cost $14,600 dollars compared to the manual gurney cost of $7,000.
Staff found that the power assisted gurney's can lift and carry up to 700 Ibs without staff assistance, as
compared to the department's current manual gurneys which are limited to 500 Ibs lift and carrying weight
and require 4 or more personnel to lift the gurney. Through using the power gurney in the operational
environment, staff found the gurney extremely effective in lifting and moving patients without subjecting staff
to lifting related injuries.
Recommendations: Although more expensive, staff found that the powered gurney was extremely
effective, and protects staff from lifting related injuries. Staff recommends council approve the purchase of a
sole source of a Stryker Power Pro Ambulance Gurney from Stryker Inc.
Fiscal Impact:
X I Budgeted FY 08/09 F-1 New Appropriation Not Applicable Budget Amendment Required
Amount Budgeted Source of Funds (title and Account Number Addtl. Appropriation Requested
$14,600 EMS Operational Supplies 105.2101.690.000 None
Recommended Action(s): Approve the Sole Source purchase of a Stryker Power Pro Ambulance
Gurney in an amount not to exceed $14,600 from account 105.2101.690.000
Alternative Council Option(s): Provide Staff with alternative direction
Citizens advised:
Requested by: Chris Dewey, Director of Public Safety
Prepared by: Kirk Thomsen, EMS Division Chief
Coordinated with: Jane Chambers, City Manager
Attachments:
Approved: ~
Jae 'hambers, City Manager
SUBJECT: NOTIFICATION OF SOLE SOURCE PURCHASE OF A NARCOTIC DETECTING
DOG, IN THE AMOUNT OF $8,893.75, FROM MASTER K-9 INC.
Background: At the January 20, 2010 City Council meeting, the City Council authorized the re-budgeting of
surplus police funds for the purpose of creating a Police Narcotic Canine program, and purchasing 2 Police
Narcotic dogs.
After receiving authorization, staff worked with narcotic dog experts within our region, who currently train
and utilize narcotic dogs, to research and develop our department's narcotic detection dog program.
Narcotic detection dogs undergo a lengthy training and certification process. Once trained, these dogs
require weekly and monthly training to assure their reliability in detecting narcotics.
Law enforcement agencies within our region have partnered together to provide the on-going detection dog
training at significantly reduced costs through their cost sharing partnership, and contracted with Master K-9
Inc., to provide these training and certification services. These agencies have agreed to include our agency
in this on-going partnership, to reduce our on-going training costs in creating a narcotic dog program.
Discussion: Because of the significant training and cost sharing savings associated in participating regional
law enforcement narcotic detection dog training partnership, staff selected Master K-9 Inc., for the purchase
and training of our first narcotic detection dog. The department is now in the process of selecting and
training the second authorized police dog. The department is expected to take delivery of our second
narcotic detection dog later this spring.
In compliance with Section 1522 of the Ukiah City Code, this report is being submitted to the City Council for
the purpose of reporting an acquisition costing $5,000 or more, but less than $10,000.
Fiscal Impact:
Not Applicable Budget Amendment Required
® Budgeted FY 09/10 F-1 New Appropriation
7 F
Amount Budgeted Source of Funds (title and Account Number Addit. Appropriation Requested
$20,793 Police Capitol Equipment 105.2001.800.000 None
Recommended Action(s): No action required, notification of sole source purchase, in the amount of
$8,893.75, from Master K-9 Inc., from account 205.2001.800.000.
Alternative Council Option(s):
Citizens advised:
Requested by: Chris Dewey, Director of Public Safety
Prepared by: Chris Dewey, Director of Public Safety
Coordinated with: Jane Chambers, City Manager
Attachments: None
Approved:
1~
Ja tphambers, City Manager
city cJ, - e"kicah
ITEM NO.: 7e
MEETING DATE:
June 2, 2010
AGENDA SUMMARY REPORT
SUBJECT: UPDATE REPORT REGARDING STATUS OF WATER EMERGENCY CONDITIONS
NECESSITATING EMERGENCY RESOLUTION TO EXPEDITE CONSTRUCTION OF
OAK MANOR DRIVE WATER WELL
Background: On March 4, 2009, at a regular meeting of the Ukiah City Council, an emergency resolution
was adopted to expedite the construction of a water well at Oak Manor Drive in Oak Manor Park to the
east of the tennis courts. Pursuant to Public Contracts Code Section 22050(b)(1), the City Council
delegated authority to the City Manager to order action pursuant to subparagraph (a)(1) of that section
and directed the City Manager to undertake all steps necessary to have the well constructed without
going through a formal competitive bidding process. Pursuant to Public Contracts Code Section
22050(b)(3), adoption of this resolution requires the City Manager to report back to the City Council at its
next regular meeting setting forth the reasons justifying why the emergency will not permit a delay
resulting from the formal competitive solicitation for bids for the well and why the action is necessary to
respond to the emergency.
Discussion: The reasons for the emergency were set forth in Resolution No.2009-12. These reasons
continue to exist: 1) the State of Emergency declared by the Governor of California due to drought
conditions, 2) recommendation to municipalities from Victoria Whitney, Deputy Director for Water Rights
for the State of California Water Resources Control Board, that drought conditions may necessitate
suspension of surface water rights this summer and to secure groundwater sources, 3) the time required
to drill, develop, and construct a temporary connection from a new groundwater well into the City's water
distribution system is not sufficient to comply with the noticing requirements of the Public Contracts Code
formal bidding process.
The date of the bid opening for construction of the Gobbi Street well head and pump house was June 18,
2009. The contractor mobilized their equipment on site on July 13. Substantial completion of this project
was November 10t". The time required from the bid opening to substantial completion of the Gobbi Street
well head and pump house was approximately five months.
Recommended Action(s): Receive the report.
Continued on Paae 2
Alternative Council Option(s): Reject recommended action(s) and provide staff with alternate
direction.
Citizens advised: n/a
Requested by: Tim Eriksen, Director of Public Works/City Engineer
Prepared by: Ann Burck, Deputy Director Public Works - Water & Sewer Division
Coordinated with: Jane Chambers, City Manager
Attachments:
Approved: 0A14,A eX~-
Chambers, City Manager
U
In the December 16, 2009 Agenda Summary Report, Item 7d, a best case schedule was developed
assuming the Oak Manor well head and pump house bid in December 2009 and construction started no
later than January. With this schedule it was possible the Oak Manor well (Well #8) would have been
completed in May 2010. This completion date assumed a shortened bid period and no delays due to
weather or other circumstances.
Bids were issued on January 8, 2010. The revised schedule includes the January bid date and a 30 day
noticing period with bids due February 9th. The lowest, qualifying bid was submitted by Wipf Construction
in the amount of $377,000 and was approved by Council on February 17th. Construction began April 26,
2010.
The pump house slab was poured May 24, 2010. The rain has delayed the schedule about 2 weeks.
Currently, if there are no further impacts due to rain, the scheduled completion is mid to late June 2010.
City 4j- ZIA-:i4;rr7
ITEM NO.: 7f
MEETING DATE:
AGENDA SUMMARY REPORT
June 2, 2010
SUBJECT: ADOPTION OF RESOLUTION REQUESTING THE BOARD OF SUPERVISORS OF
THE COUNTY OF MENDOCINO TO REQUEST THE COUNTY CLERK TO CONDUCT
THE MUNICIPAL ELECTION OF THE CITY OF UKIAH ON TUESDAY, NOVEMBER 2,
2010, AND TO CONSOLIDATE SAID ELECTION WITH THE STATEWIDE GENERAL
ELECTION HELD ON THE SAME DATE PURSUANT TO §10403 OF THE
ELECTIONS CODE.
Background: The City of Ukiah historically has consolidated its elections with Mendocino County.
Attached for Council's adoption is a proposed Resolution calling an election on November 2, 2010,
consolidating the election with the Statewide General Election, and contracting with the County of
Mendocino for election services. The City Attorney has reviewed the proposed Resolution. The
election is necessary to fill the vacancies created by the expiration of three Council terms (Landis,
Thomas, and Baldwin), as well as any ballot measures.
The estimated cost for providing these election services is $25,000 and will be budgeted
accordingly in the Fiscal Year 2010-2011 Elections budget.
Discussion:
Fiscal Impact:
❑X Budgeted FY 10/11 1-1 New Appropriation Not Applicable Budget Amendment Required
Amount Budgeted Source of Funds (title and Account Number Addit. Appropriation Requested
$25,000 Contractual Services 100-1105-250-000
Recommended Action(s): 1. Adopt the Resolution Requesting the Board of Supervisors of the
County of Mendocino to Request the County Clerk to Conduct the Municipal Election of the City of
Ukiah on Tuesday, November 2, 2010, and to Consolidate said Election with the Statewide General
Election held on the same date and 2. Approve the Election Services Agreement Authorizing the Mayor
to Sign it.
Alternative Council Option(s): Choose not to consolidate the election with the County of Mendocino
and direct the City Clerk to conduct the election.
Citizens advised: N/A
Requested by: N/A
Prepared by: JoAnne Currie, City Clerk
Coordinated with: Jane Chambers, City Manager; City Attorney Rapport; and Mendocino County
Clerk's Office
Attachments: Resolution
Elections Aareement
Approved:
_gqA-"-
Ja 611-- hambers, City Manager
~Y
ATTACHME
RESOLUTION NO. 2010-
WHEREAS, the City Council of the City of Ukiah called a Municipal Election to be
held on Tuesday, November 2, 2010; and
WHEREAS, Section 10002 of the Elections Code of the State of California
authorizes the Clerk of the County of Mendocino to render specified services relating to the
conduct of an election to any city or district which has by resolution requested the Board of
Supervisors to permit the County Clerk to render the services, subject to requirements set
forth in that section; and
WHEREAS, the City of Ukiah election shall consist of the following election
candidates, three (3) City Council positions, any ballot measures, and all other required
election matters.
NOW, THEREFORE, BE IT RESOLVED that pursuant to the above cited
provisions, the Board of Supervisors of the County of Mendocino is hereby requested to
permit the County Clerk to perform and render all services and proceedings incidental to
and connected with the conduct of the municipal election of the City of Ukiah with the
cooperation and assistance of the City Clerk of the City of Ukiah, such services to include,
but not limited to the following:
1) Establish voting precincts, secure locations for polling places, and secure the
services of election officers for each precinct as required by law.
2) Prepare and furnish to the election officers necessary supplies for the conduct of
the election.
3) Cause to be translated, as appropriate, and printed the requisite number of sample
ballots, official ballots, rosters and other necessary forms.
4) Make necessary arrangements for the delivery of supplies to the various precincts.
5) Distribute absent voter ballots as required by law.
6) Receive the return of elections material and supplies.
7) Canvass the returns of the election, including the absent voter ballots.
8) Furnish a tabulation of the number of votes cast in each precinct.
9) Make all the necessary arrangements to pay the precinct board members and other
costs of the election incurred as the result of services performed for the City of
Ukiah.
10) Publish a list of precincts, election officers; polling places and hours polls will be
open.
11) Verify signatures appearing on nomination papers.
BE IT FURTHER RESOLVED, the City Clerk shall be responsible for:
1) Publication of Notice of Election.
2) Distribution and receipt of nomination papers.
3) Receipt of Candidates Statement and printing deposit.
4) Publication of Candidates as required by law.
5) Receive campaign statements and disclosure statements as required by law.
THE FOREGOING RESOLUTION WAS ADOPTED at a regular meeting of the
Ukiah City Council held on the 2nd day June 2010, by the following roll call vote.
AYES:
NOES:
ABSENT:
ABSTAIN:
Benj Thomas, Mayor
ATTEST:
JoAnne M. Currie, City Clerk
ATTACHMENT 7-
AGREEMENT BETWEEN THE CITY OF UKIA AND
ENDOCINO COUNTY FOR ELECTION SERVICES
WHEREAS, the General Municipal Election has been set for November 2, 2010, the
same day as the Statewide General Election, and the City Council of the City of Ukiah
desires that the County Clerk shall conduct the election of November 2, 2010, for the filling
of three (3) Councilmembers, and any other vacant seats or ballot measures submitted to
the Board of Supervisors with request for consolidation at least 88 days before the election.
NOW, THEREFORE, the City of Ukiah and County of Mendocino agree as follows:
The County Clerk shall provide the following services in connection with conducting
the November 2, 2010 Municipal Election, on the City's behalf:
a. Establish precinct boundaries to coincide with Statewide Election;
b. Designate polling places and appoint election officers;
C. Notify election officers of their appointment and instruct inspectors
concerning their duties;
d. Appoint and pay election officers;
e. Arrange for the availability of polling places, all supplies necessary for
casting ballots, and setting up voting booths;
Publish lists of precincts, election officers, polling places and hours polls will
be open;
g. Verify signatures appearing on candidates' nomination papers;
h. Provide sample ballots to each voter;
Receive absent voter applications, accept absent voter ballot returns, retain
custody of absent voter ballot, and count absent voter ballots; and
Provide Certificate of County Clerk as to result of the Canvass, for approval
by the City Council.
2. The City Clerk of the City of Ukiah shall be responsible for:
a. All functions of the City Clerk relative to arguments concerning City
measures as set forth in Elections Code § 9200, et seq., including filing and
accepting notices required;
b. Publication of the Notice of Election;
C. Publication of Candidates as required by law;
d. Distribution and receipt of nomination papers;
e. Receipt of Candidate's Statement; and
f. Receipt of campaign statements and disclosure statements as required by
law.
3. In consideration of the services rendered by the County Clerk and described herein,
the City of Ukiah agrees to pay the actual direct costs reasonably attributable to the
City's Municipal Election, and a ten percent (10%) charge for associated overhead
based upon a detailed invoice prepared by the County Clerk and presented to the
City for payment.
4
Payment for services due under this agreement shall be made after billing is
submitted by the County of Mendocino.
Dated:
CITY OF UKIA, CALIFORNIA
By:
Benj Thomas, Mayor
ATTEST:
By:
JoAnne M. Currie, City Clerk
Dated:
BOARD OF SUPERVISORS
ENDOCINO COUNTY, CALIFORNIA
By:
Carre Brown, Chair
ATTEST:
By:
Kristi Furman, Clerk of the Board
7g
June 2, 2010
SUBJECT: AWARD PURCHASE OF GRANICUS MEETING EFFICIENCY SUITE IN THE
AMOUNT OF $10,590.00.
Background: The City of Ukiah Council and Planning Meetings have been recorded for over 5 years now.
The current recording software produces audio and video in a proprietary format. Although this works
adequately to archive the meetings in its native format a lengthy manual conversion process is needed to
provide the content to the public when requests for the meeting are received. Additionally the current
solution does not provide on-line or on-demand access to these meetings.
Discussion: The City of Ukiah is looking to providing a more open government process including providing
public with Internet streaming and on-demand access to City Council and Planning Meetings. As we
reviewed possible solutions, only one vendor, Granicus, met out requirements. Granicus is the only solution
provider actually named by Laserfiche, our document management system vendor. With the goal of
providing seamless integration with our existing document management system the decision was made to
sole source the Granicus Meeting Efficiency Suite. Utilizing the Granicus Meeting Efficiency Suite ensures
that documents created and stored in Laserfiche are assimilated into the public meeting workflow and
official record. Our solution focuses on improving government communication during and after the public
meeting, and integrates with our central content/document management system to eliminate disparate
systems that may hold similar data and eliminate multiple manual processes currently used to produce and
distribute meeting recordings. This solution not only improves our current processes but adds long awaited
on-line and on-demand capabilities to increase the City's accessibility to our constituents. The ongoing
maintenance costs to use the product will be $650.00 per month ($7800.00 annually) which includes the
hardware, software, support and unlimited storage. The funding for this project in the amount of $10,590.00
was approved for the 09/10 budget in the account 100. 1965.250. 000.
Fiscal Impact:
Not Applicable Budget Amendment Required
❑X Budgeted FY 09/10 F] New Appropriation
F-1 F
Amount Budgeted Source of Funds (title and Account Number Addit. Appropriation Requested
$10,590.00 Contractual Services 100.1965.250.000
Recommended Action(s): Award Purchase of Granicus Meeting Efficiency Suite in the amount of
$10,590.00 from budget account 100.1965.250.000.
Alternative Council Option(s): Reject and provide direction to staff.
Citizens advised:
Requested by: Steven Butler, IT Supervisor
Prepared by: Steven Butler, IT Supervisor
Coordinated with: Sage Sangiacomo, Asst. City Manager, JoAnne Currie, City Clerk
Attachments:
Approved:
Jan hambers, City Manager
7h
June 2, 2010
SUBJECT: NOTIFICATION TO CITY COUNCIL OF THE PURCHASE OF TOXICITY TESTING
SERVICES FOR THE WASTEWATER TREATMENT PLANT TO PACIFIC ECORISK
FOR A TOTAL NOT TO EXCEED $5385.00
Background: Section 1522 of the Municipal Code requires a report to the City council of purchases from
$5,000.00 to $10,000.00. In accordance with the above-mentioned section, this report is submitted to the
City Council.
The WWTP Waste Discharge Requirements specify that an Acute Toxicity Bioassay be conducted on plant
effluent monthly during periods of discharge to the Russian River. This laboratory test measures the quality
of plant effluent by exposing test organisms to the effluent and comparing the effects to that of control
organisms.
Discussion: Price quotes for Acute Toxicity Testing were solicited from three laboratories. Pacific EcoRisk
provided a price quote of $5385.00. Alpha Laboratories, Inc. and Brelje and Race Laboratories, Inc.
declined to provide price quotes because they do not provide this service. No other laboratories in this area
were found to provide this type of test.
Funds for the testing service have been budgeted in the WWTP Operation and Maintenance Fund under
account number 612.3580.250.001 and adequate funds are available for the purchase.
Fiscal Impact:
New Appropriation Not Applicable Budget Amendment Required
® Budgeted FY 09/10
1-1
Amount Budgeted Source of Funds (title and Account Number Addit. Approp. Requested
$5,385.00 Laboratory Testing Services 612-3580-250-001 none
Recommended Action(s): Receive and file notification of the purchase of toxicity testing services for
the Water Reclamation Facility to Pacific EcoRisk for an amount not to exceed 5,385.00.
Alternative Council Option(s): N/A
Citizens advised: N/A
Requested by: Ann Burck, Deputy Director of Public Works - Water & Sewer Division
Prepared by: Andrew T. Luke, WWTP Supervisor
Coordinated with: Jane Chambers, City Manager
Attachments: N/A
Approved: _
Jane ambers, City Manager
,City 01_1zjk-_ia/1_
ITEM NO..
7i
MEETING DATE: June 2, 2010
AGENDA SUMMARY REPORT
SUBJECT: AUTHORIZE THE CITY MANAGER TO NEGOTIATE AND EXECUTE A 36 MONTH
LEASE AND MAINTENANCE AGREEMENT WITH TOSHIBA BUSINESS SOLUTIONS
FOR FOUR MULTI-FUNCTION COPY MACHINES.
The lease agreements for four multi-function machines that currently support City staff have expired. One
machine is located in the main Civic Center offices, one in the Civic Center Annex, and two in Public Safety.
The machines are networked for employees to maximize efficiency - enabling use directly from their
desktops. They are used for multiple purposes, including copying, printing, faxing, scanning to email, three-
hole punching, collating and stapling.
In March, a Request for Proposal (RFP) was released for the replacement of these machines, and is
included as Attachment #1. The RFP requested pricing for both color and black ink only machines. The
main Civic Center offices and Civic Center Annex locations currently use color. Public Safety currently has
black ink only, but wanted the option of replacing one of the black ink machines with a color machine.
Proposals were received from six companies. The following chart summarizes the monthly lease and
maintenance costs from the responses received for color and black ink only copiers. (Please note that the
percentage used for color versus black ink only copies to estimate the total monthly cost of both lease and
maintenance are based on averages from this last year's actual usage of the machines located in the main
Civic Center offices and Civic Center Annex.)
Color
Vendor
Monthly Lease
Maintenance Cost
Per Copy Charge
BW / Color
Estimated Cost per Month
Based on 25,000 copies total:
70% (17,500) B/W
and 30% 7,500 Color
OCE North America
$389.51
$.007 / $.050
$887.01
IKON Office Solutions
$330.00
$.006 / $.0575
$866.25
Toshiba Business Solutions
$273.64
$.005 / $.049
$728.64
Astro Business Technology
$472.00
$.0075 / $.075
$1,165.75
Discovery Office Systems
$292.00
$.0080 / $.0472
$786.00
Advanced Xerographics - Option 1
$481.61
(Tiered)$.006/$.02781$.0553
$793.35
Advanced Xero raphics - O tion 2
$392.48
$.0092 /.070
$1078.48
Recommended Action(s): Authorize the City Manager to negotiate and execute lease and
maintenance agreement with Toshiba Business Solutions for multi-function copy machines.
Alternative Council Option(s): Determine that the requested action is not appropriate and select
another vendor, or provide further direction to staff.
Citizens advised: N/A
Requested by: Gordon Elton, Director of Finance
Prepared by: Mary Horger, Purchasing Supervisor
Coordinated with: Richard Benson, Admin. Support Clerk, Public Safety, Community Services, and
Electric Utility
Attachments: Attachment #1 - RFP, Attachment #2 - Toshiba Performance Guarantee
Approved:
z~?~
Ja Chambers, City Manager
Black Ink Only
Vendor
Monthly Lease
Maintenance Cost
Per Co Charge
Estimated Cost per Month
Based on 13,000 copies
OCE North America
$210.29
$.0070
$301.00
IKON Office Solutions
$263.00
$.0060
$341.00
Toshiba Business Solutions
$172.67
$.0050
$237.67
Astro Business Technology
$256.00
$.0075
$253.50
Discovery Office Systems
$239.00
$.0080
$343.00
Advanced Xero raphics
$215.02
$.0060
$293.02
When comparing both prices and features, Toshiba Business Solutions has been found to be the best fit. If
approved, Toshiba will be supplying a Toshiba eStudio 5520C for our color needs and the Toshiba eStudio
555 for our black ink only needs. Both machines perform at 55 copies per minute, for both black and color
ink. Staff had the opportunity to visit a Toshiba customer who is currently operating the color machine being
offered, and was very satisfied with the machine's quality and operation.
The maintenance fees will include toner, developer, copy cartridges, fusers and staples. Contractor shall be
responsible for all cost of maintenance and repairs, including labor, parts, travel time, mileage, supplies and
any other expenses required to maintain the equipment in proper order. The machines will also be backed
by the Toshiba Performance Guarantee (please see Attachment 2 for your review).
Staff is requesting Council's authorization to enter into a 36 month lease and maintenance agreement with
Toshiba Business Solutions. Benefits of leasing, as opposed to purchasing the machines, include the
option to cancel the lease for such things as non-performance or unexpected budgetary constraints, as well
as the option to upgrade to new technology at the end of the lease.
The resulting agreements will be for three (3) Toshiba eStudio 5520C color machines, and one (1) Toshiba
eStudio 555 black ink only machine. Below is a summary of the machines, locations, and fund numbers
associated with the expense of this agreement. Please note, that these costs are only estimated, and that
the total monthly charge will vary month-to-month, dependant on actual copy count. Funds have been
budgeted and are available in the fund numbers referenced.
Model
Location
Estimated Lease & Maintenance Cost
Fund number
eStudio 5520C
Civic Center, Main
$728.64 per month
100.1915.250.000
eStudio 5520C
Civic Center, Annex
$728.64 per month
100.1915.250.000
eStudio 5520C
Public Safety
$510.24 per month*
105.2001.255.000 - 55%
105.2101.255.005 - 35%
678.2040.255.000 - 5%
220.4601.255.000 - 5%
eStudio 555
Public Safety
$237.67 per month
105.2001.255.000- 55%
105.2101.255.005 - 35%
678.2040.255.000 - 5%
220.4601.255.000 - 5%
*Cost has been adjusted based on a 13,000 per month copy count.
Fiscal Impact:
X I Budgeted FY 09/10 F] New Appropriation F~ Not Applicable Budget Amendment Required
Amount Budgeted Source of Funds (title and Account Number Addit. Appropriation Requested
***PLEASE SEE ABOVE***
REQUEST FOR PROPOSAL #E30395
FOUR (4) NEW COPY/PRINTER/SCANNER MACHINES
March 10, 2010
The City of Ukiah invites proposals for four (4) new copy/printer/scanner machines for the City of Ukiah.
The following specifications shall be considered minimum. All exceptions from these specifications shall be described in the
proposal response. The City reserves the right to reject any or all proposals and to determine which proposal, in its opinion, will
best serve the needs and requirements of the City. Right is reserved to accept separate items unless specifically denied by
Contractor. Right is reserved to reject a proposal from any Contractor who has previously failed to perform adequately for the
City. In case of default, the City of Ukiah may procure the equipment quoted on from other sources and hold the original
awarded contractor liable for any increased costs. The type of equipment, price, terms, delivery point, and delivery date may
individually or collectively be the basis of the awarding of the proposal.
Proposal Due Date
Proposals will be received until 12:00 p.m., March 22nd, 2010 at the office of the Purchasing Supervisor, Attn: Mary Horger, at
411 West Clay Street, Ukiah, CA 95482, at which time all proposals will be opened. Faxed and emailed proposals will also be
accepted, and can be sent to fax number (707) 463-6234, or the following email address: mhorger@cityofukiah.com. It will be
the sole responsibility of the Vendor to have their proposals delivered to the City before the closing hour and date. Late
proposals will not be considered and will be returned unopened to the sender. Questions concerning this specification on
this RFP may be directed to: Mary Horger, Purchasing Supervisor at (707) 463.6233.
Equipment Description
The City is replacing two (2) machines that are used in the general administrative offices (one (1) in the main Civic Center
Building, and one (1) in the Annex), and two (2) machines that are used by Public Safety.
Attached are three (3) proposal sheets. Proposal sheet #1 identifies the desired features for the two machines for general
administrative offices. Proposal sheet #2 identifies the desired minimum features for the machines for Public Safety- black ink
only. Proposal sheet #3 identifies the minimum features for the machines for Public Safety, but a color copier option.
Each contractor is to submit all three proposal sheets, filled out completely. Failure to do say may deem your proposal non-
responsive.
Information Technology Requirements
The equipment offered should meet the following requirements set by the City's Information Technology Department:
• Support of the following Windows versions: Windows Server 2003 (both 32 bit and x64), Windows Server 2008 (both
32 bit and x64 versions), Windows XP, Vista and 7 (both 32 bit and x64 versions).
• Integration with Windows Active directory.
• Client faxing support.
• Ability to scan to a network drive.
• Ability to scan to PDF.
Equipment Demonstration
The City may determine that a demonstration of the equipment on City premises may be necessary in order to make a final
decision.
Delivery and Removal
Contractor shall be responsible for all delivery costs, and removal of all packing material. If the City chooses to enter a lease,
and the resulting lease agreement has reached the end of its term, the Contractor shall bear all cost for the return of the
equipment, including, but not limited to, disconnecting, packaging, packaging materials, and freight.
Installation
Contractor must perform complete installation and verify satisfactory operation of all equipment. Contractor is to provide fully
operational drivers and software/firmware needed for the City's Information Technology department to load to the network. In
accordance with the machine's configuration, Contractor must demonstrate the machine's ability to successfully copy, print, fax
and/or scan from the machine and desktop. An operators manual shall be provided with each copy machine.
Training and Demonstrations
The Contractor shall provide training and demonstrations, at no additional cost, upon initial installation and on an "as needed"
basis thereafter, as may be requested by City personnel.
Supplies
Contractor shall provide, at no additional cost to the City, all consumable supplies, excluding paper, throughout the term of the
resulting contract, which shall include shipping charges. Supplies include, but are not limited to: toner, developer, copy
cartridges, fusers and staples. Contractor shall deliver ordered supplies within three (3) working days after notification. At the
time of copier installation, Contractor shall deliver supplies for not less than an estimated two (2) month period for each machine
placed.
Maintenance of Equipment
Contractor shall make repairs and adjustments necessary to keep and maintain copy quality and equipment operations within
manufacturer's specifications. Contractor shall be responsible for all cost of maintenance and repairs, including labor, parts,
travel time, mileage, supplies and any other expenses required to maintain the equipment in proper working order. Contractor
shall perform preventative maintenance on all copiers per manufacturer's specifications. Contractor shall provide the
manufacturer's scheduled maintenance program for each copier.
Response Time
Contractor shall respond on-site to verbal service calls within an average response time of four (4) workday hours after
notification of a malfunction. Workday hours are defined as those running from 8 a.m. to 5 p.m. Monday through Friday, except
City holidays. Average response time will be calculated based upon the response times during a calendar week. Contractor
shall adhere to a standard policy of calling back within two hours of the call for service to advise departmental personnel how and
when the problem will be addressed. Calculation of response time starts when City personnel report a malfunction to the
Contractor. The City's records shall be determinate of the Contractor's performance of this obligation. Contractor's repeated
failure to meet the four (4) hour response time obligation will constitute a material breach.
Repair Time
All equipment must be repaired or replaced within 24 consecutive hours (not workday hours) of the initial call for service. The
City's records shall be determinate of Contractor's performance of this obligation. Contractor's repeated failure to comply with
this obligation shall constitute a material breach. When repair time exceeds or is expected to exceed 24 consecutive hours,
Contractor, at the Contractor's expense, shall replace the unrepaired machine with a reasonably comparable "loaner" machine
that allows continued copy machine operations. "Reasonably comparable" shall, at the very least, mean a machine with a speed
that is no less than 15 copies per minute from the machine being temporarily replaced. After five business days wherein a
reasonably comparable loaner machine has been placed, such locations must then be provided with a loaner machine that
provides equal or better performance and features to the original equipment being temporarily replaced. City's records shall be
determinate of Contractor's performance of this obligation. Contractor's repeated failure to comply with this obligation shall
constitute a material breach. If a replacement machine is provided, whether as a loaner or as a permanent replacement, it shall
be subject to the terms and conditions of the resulting contract.
Excessive Service Calls
Copiers that develop a trend of requiring an excessive number of service calls (defined as four [4] service call in a month or six
[6] service calls within a 90 day period), must be replaced with comparable equipment of equal or greater capability at no
additional charge. City's records shall be determinate of Contractor's performance of this obligation. Contractor's repeated
failure to comply with this obligation shall constitute a material breach.
Service Logs
Contractor shall maintain a service log at each machine. The service log is to be kept in or with the machine.
Meter Readings
The Contractor shall be responsible for insuring the collection and accuracy of meter readings upon which billing charges are
based. Any methods utilized to collect the billing data must be auditable by the City.
Property Taxes
The Contractor shall be responsible to pay personal property taxes on all equipment.
Payment Terms
Payment will be due net 30 days from receipt of undisputed invoice. Payment will be considered to be made when the City mails
it to the Contractor.
Lease - End of Term Options
If a lease is selected, at the end of the lease term, upon 30 days prior written notice to Contractor, the City will return all of the
equipment. The agreement will be expected to continue on a month-to-month basis at the same minimum monthly payments as
applied during the term, until the equipment is returned to the Contractor.
City of Ukiah Business License
Prior to award, Contractor will be required to possess a current City of Ukiah business license. For more information, contact
Kathy Norris, Finance Department at (707) 463-6202.
Insurance Requirements
Contractor shall furnish to the City certificates of insurance within 5 days of date of notification of award. (See attached
"Insurance Requirements for Contractors"). Insurance shall be maintained in force until the contract period has expired. The
cost of such insurance shall be borne by the Contractor. If you have questions regarding our insurance requirements contact:
Melody Harris, Risk Manager at 707-463-6287.
Each insurance policy required by this clause shall be endorsed to state that coverage and shall not be suspended, voided,
canceled, reduced in coverage or in limits except after thirty (30) days prior written notice by certified mail, return receipt
requested, has been given to the City.
Exceptions
Contractor is to identify any exceptions you are proposing with respect to these specifications. Additionally, if there are any
exceptions to the City's insurance requirements, the Consultant should list the exception in the proposals. A separate form has
been provided to list any exceptions.
Indemnification and Hold Harmless
Contractor agrees to accept all responsibility for loss or damage to any person or entity, and to defend, indemnify, hold
harmless and release the City, its officers, agents and employees, from and against any and all actions, claims, damages,
disabilities, or costs of litigation that may be asserted by any person or entity, arising out of or in connection with the negligent or
willful misconduct in the performance by contractor hereunder, whether or not there is concurrent, passive or active negligence
on the part of the City, but excluding liability due to the sole active negligence or willful misconduct of the City. This
indemnification obligation is not limited in any way by any limitation on the amount or type of damages or compensation payable
to or for Contractor or its agents under Workmen's Compensation acts, disability benefits acts or other employee's benefits acts.
Contractor shall be liable to the City for any loss or damage to City property arising from or in connection with
Contractor performance hereunder.
The undersigned declares they are familiar with the items specified and have carefully read the RFP
specification/requirements, checked all of the figures stated on the specifications and accepts full responsibility for any error or
omission in the preparation of this proposal.
The undersigned acknowledges that this document, together with the City's Request for Proposal, the purchase order
issued by the City, the insurance requirements for contractors, and the Contractor Statement Regarding insurance coverage
comprise a written agreement between the Contractor and the City and is binding on both parties.
This proposal is submitted by, (check one)
Individual Owner Partnership Corporation Other
Legal Name of Contractor
Address of Contractor
TaxID#
Phone Number Fax Number
By:
Signature
Date
Print or Type Name:
Title
REQUIRED DATA
REFERENCES
1. COMPANY NAME:
CONTACT:
ADDRESS:
PHONE
2. COMPANY NAME:
CONTACT
ADDRESS
PHONE:
3. COMPANY NAME:
CONTACT:
ADDRESS
PHONE:
4. COMPANY NAME:
CONTACT:
ADDRESS:
Model of Copier Sold, Date of Sale
PHONE:
CONTRACTOR STATEMENT
REGARDING INSURANCE COVERAGE
(To be submitted with Proposal)
PROPOSER/CONTRACTOR HEREBY CERTIFIES that he/she has reviewed and understands the insurance coverage
requirements specified in the Request for Proposal for:
#E30395 - Four (4) New Copy Machines
Should we/I be awarded the contract, we/I certify that we/I can meet the specified requirements for insurance, including
insurance coverage of the subcontractors, and agree to name the City of Ukiah as Additional Insured for the work specified.
And we/1 will comply with the provisions of Section 3700 of the Labor Code, which require every employer to be insured against
liability for worker's compensation or to undertake self-insurance in accordance with the provisions of that code, before
commencing the performance of the work specified.
Please Print (Person, Firm, or Corporation)
Signature of Authorized Representative
Please Print (Name & Title of Authorized Representative)
Date Phone Number
Ci w• s _ Taft
INSURANCE REQUIREMENTS FOR CONTRACTORS
Contractor shall procure and maintain for the duration of the contract insurance against claims for injuries to
persons or damages to property which may arise from or in connection with the performance of the work
hereunder by the Contractor, his agents, representatives, employees or subcontractors.
1. Minimum Scope of Insurance
Coverage shall be at least as broad as:
A. Insurance Services Office Commercial General Liability coverage (Form No. CG 20 10 10 01 and
Commercial General Liability - Completed Operations Form No. CG 20 37 10 01).
B. Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability, code 1
(any auto).
C. Worker's Compensation insurance as required by the State of California and Employer's Liability
Insurance.
H. Minimum Limits of Insurance
Contractor shall maintain limits no less than:
A. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage
including operations, products and completed operations. If Commercial General Liability
Insurance or other form with a general aggregate limit is used, either the general aggregate limit
shall apply separately to this project/location or the general aggregate limit shall be twice the
required occurrence limit. Insurance must be written on an occurrence basis.
B. Automobile Liability: $1,000,000 per accident for bodily injury and property damage. Insurance must
be written on an occurrence basis.
C. Worker's Compensation Employer's Liability: $1,000,000 per accident for bodily injury or disease.
Ill. Deductibles and Self-Insured Retentions
Any deductibles or self-insured retentions must be declared to and approved by the City. The City may require
the insurer to reduce or eliminate such deductibles or self-insured retentions with respect to the City, its officers,
officials, employees and volunteers; or the Contractor to provide a financial guarantee satisfactory to the City
guaranteeing payment of losses and related investigations, claim administration and defense expenses; or to
approve the deductible without a guarantee.
IV. REQUIRED Insurance Provisions
Proof of general liability and automobile liability policies are to contain, or be endorsed to contain, the
following provisions:
A. The City, its officers, officials, employees, and volunteers are to be covered as ADDITIONAL
INSURED with respect to liability arising out of automobiles owned, leased, hired or borrowed by or on
behalf of the contractor; and with respect to liability arising out of work or operations performed by or on
behalf of the Contractor including materials, parts or equipment, furnished in connection with such work or
operations. General liability coverage can be provided in the form of an endorsement to the Contractor's
insurance, or as a separate owner's policy.
B. The workers' compensation policy is to be endorsed with a waiver of subrogation. The
insurance company, in its endorsement, agrees to waive all rights of subrogation against the City, its
officers, officials, employees and volunteers for losses paid under the terms of this policy which arises
from the work performed by the named insured for the City. NOTE: You cannot be added as an additional
insured on a workers' compensation policy.
C. For any claims related to this project, the Contractor's insurance coverage shall be primary insurance
with respect to the City, its officers, officials, employees, and volunteers. Any insurance or self-insurance
maintained by the City, its officers, officials, employees, or volunteers shall be in excess of the
Contractor's insurance and shall not contribute with it.
Rev: 11120108 Page 1 of 2
D. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be
canceled by either party, except after thirty (30) days' prior written notice by certified mail, return receipt
requested, has been given to the City.
E. Note: (This protects the Contractor) -Coverage shall not extend to any indemnity coverage for the
active negligence of the additional insured in any case where an agreement to indemnify the additional
insured would be invalid under Subdivision (b) of Section 2782 of Civil Code.
V. RATING -Acceptability of Insurers
Insurance is to be placed with admitted California insurers with a current A.M. Best's rating of no less than A- for
financial strength, AA for long-term credit rating and AMB-1 for short-term credit rating.
VI. Verification of Coverage
Contractor shall furnish the City with original certificates and amendatory endorsements affecting coverage
required by this clause. The endorsements should be on forms provided by the City. If endorsements are on
forms other than the City's forms, those endorsements or policies must provide coverage that is equivalent to or
better than the forms requested by the City. All certificates and endorsements are to be received and approved
by the City before work commences. The City reserves the right to require complete, certified copies of all
required insurance policies, including endorsements affecting the coverage required by these specifications at
any time.
VII. Subcontractors
Contractor shall include all subcontractors as insured under its policies or shall furnish separate certificates and
endorsements for each subcontractor. All coverage for subcontractors shall be subject to all of the requirements
stated herein.
If you have questions regarding our insurance requirements contact:
Risk Manager
(707) 463-6287 FAX (707) 463-6204
Rev: 11120/08 Page 2 of 2
EXCEPTIONS
List all exceptions you have to the RFP on the following lines and submit with
PROPOSAL SHEET #1 - GENERAL ADMINISTRATION - COLOR COPIER
Instructions: On the left are the City's desired minimum specifications and information request. In the "Contractor's Response" section, please fill in completely, as it pertains to
the equipment you are offering. If you have additional comments, please add to that column as necessary. Supplemental brochures for the equipment should be included with
response.
City's Specifications Contractor's Response Additional Comments
Model Name/Number:
25,000 copies per month
50 copies per minute minimum
Equipment to come complete w/stand(Y/N)
Equipment overall outside dimensions:
Copy resolution (dpi)
Print resolution (dpi)
Accommodate paper up to 11"x17"(Y/N)
Accommodate paper 17 to 110 lb (Y/N)
Automatic Document Feeder (Y/N)
How many sheet capacity?
Collator (YIN)
Sorter (Y/N)
Simplex/Duplex (Y/N)
Multi-position stapling (Y/N)
Max sheet stapling capability?
Hole Punch, 2-3 (Y/N)
Faxing (Y/N)
Network Scanning with Email (Y/N)
Security Codes (Y/N)
Network Printing Capability (Y/N)
Use of recycled paper. (Y/N)
Paper Drawers
One (1) 100 sheet auto. (YIN)
Two (2) 500 sheet drawers (Y/N)
Other drawers included? (Please state qty.
& size)
Automatic Reduction and Enlargement
(min./max.) (Please provide range.)
Outright purchase price (FOB Ukiah) EXCLUDING
TAX:
Lease Price FOB UKIAH EXCLUDING TAX:
36 month lease (price per month):
48 month lease (price per month):
60 month lease (price per month):
Maintenance:
B/W Copy, price per page:
Color Copy, price per page:
Other:
MENEM
Guaranteed response time for maintenance
calls:
Purchase Options FOB UKIAH) EXCLUDING TAX:
2500 large capacity cassette
Purchase outright
36 month lease
48 month lease
60 month lease
4000 large capacity cassette
Purchase outright
36 month lease
48 month lease
60 month lease
PROPOSAL SHEET #2 - PUBLIC SAFETY - BLACK INK ONLY
Instructions: On the left are the City's desired minimum specifications and information request. In the "Contractor's Response" section, please fill in completely, as it pertains to
the equipment you are offering. If you have additional comments, please add to that column as necessary. Supplemental brochures for the equipment should be included with
response.
rifv'c Snprifirafinnc Contractor's Response Additional Comments
Model Name/Number:
13,000 copies per month
50 copies per minute minimum
Equipment to come complete w/stand.(Y/N)
Equipment overall outside dimensions:
Copy resolution (dpi)
Print resolution (dpi)
Accommodate paper up to 11"x17"(Y/N)
Accommodate paper 17 to 110 lb (YIN)
Automatic Document Feeder (Y/N)
How many sheet capacity?
Collator (Y/N)
Multi-position sta
Max sheet stapl
Hole Punch, 2-3
Lease Price FOB UKIAH EXCLUDING TAX:
36 month lease (price per month):
48 month lease (price per month):
60 month lease (price per month):
Maintenance:
B/W Copy, price per page:
Other:
Guaranteed response time for maintenance
calls:
Purchase Options (FOB UKIAH) EXCLUDING
TAX:
2500 larcie capacity cassette
36 month lease
48 month lease
60 month lease
4000 large capacity cassette
Purchase outright
36 month lease
48 month lease
60 month lease
PROPOSAL SHEET #3 - PUBLIC SAFETY - COLOR COPIER OPTION
Instructions: On the left are the City's desired minimum specifications and information request. In the "Contractor's Response" section, please fill in completely, as it pertains to
the equipment you are offering. If you have additional comments, please add to that column as necessary. Supplemental brochures for the equipment should be included with
Comments
Model Name/Number:
13,000 copies per month
50 copies per minute minimum
Equipment to come complete w/stand.(N/Y)
Equipment overall outside dimensions:
Copy resolution (dpi)
Print resolution (dpi)
Accommodate paper up to 11"x17"(Y/N)
Accommodate paper 17 to 110 lb (Y/N)
Automatic Document Feeder (Y/N)
How many sheet capacity?
Collator (Y/N)
Sorter (Y/N)
Max sheet staff
Hole Punch, 2-3
Network Printing Capability (Y/N)
Use of recycled paper. (YIN)
Lease Price FOB UKIAH EXCLUDING TAX:
36 month lease (price per month):
48 month lease (price per month):
60 month lease (price per month):
Maintenance:
B/W Copy,
Color Copy,
Other:
time for maintenance calls:
Purchase Options (FOB UKIAH EXCLUDING TAX:
2500 larae capacity cassette
Purchase outril
36 month lease
48 month lease
60 month lease
ty cassette
ht
36 month lease
48 month lease
I ~ -
Leading Innovation
f~~L',! 1;,9 l61U.I 1" 7
is ; JUST IT ma~.rW~ ,,7
IT'S THE ONE GUARANTEE YOU'LL PROBABLY NEVER USE.
The Toshiba Quality Commitment is the guarantee you will probably never have to use. We demand unparalleled
performance from our products So ii follows that we offer you the same in our guarantee. Read it and see for yourself.
There's no small print no disclaimers. Just our commitment to deliver the quality you've come to expect from one
of the industry's r i highly acclaimed leaders in copiers, facsimiles and printers. Toshiba,-quality guaranteed.
tar; E. Mathews - COO/President
TOSHIBA RELIABILITY. KNOWN THE WORLDS OVER.
SC 3iL!':CPI Si Gi!G
Yoc have the confldence ota guarantee backed by the powerful resources of `-oshiba Corporation. FORTUNEs Global
500 Issue consistently ranks sales among the fop 50 largest companies in the world
:'~VIARs !'t Ii G? C UG7S
Toshiba has received over 100 awards from Buyers Laboratory Inc , Office. Products Analyst and Better Buys For
Business, confirming our commitment to quality.
':SC 9001 GEDIIFiF P:iAi?U GTLr `f'.G, FP:Gs_MES
Quality-it's a lways our top priority, Toshiba strives to rece°,ve the highest level of certilication possible -
'aiAl'UFAGFU,Er CF ,.E YEAR
.
Named the most favored manufacturer nine tunes since 1989, by the Business Technology Association (BTA)
And named copier manufacturer of the year by Marketing Research Consultants, Inc
SI;: SIG1. A
Toshiba uses Six Sigma methodology to ensure the highest product qualify, increased customer satisfaction and
faster reaction to changing markets
-
?FSFARC: C: UchE i iti !T
Toshiba's annual R&D expenditures are in excess of S3.3 billion dollars
3 i(:.'SAD C,
Toshiba products are backed by a nationwide network of factory-trained and certified community-based personnel.
TOSHMA'S QUALM COMMMENT GUARANTEE.
TH.E 70,HIBA L UA' I i /CO ~ n.'IT~Vu'll IS OUR GUAPANIC~ T!AT YOU'RE GEI Z ING THFC l.,i(-S T' IN/ , ✓ irlCF!7 ; CHNOLJGI
DEPFAIDABi OY.. SEFVICF- A"j'D SJPPORI 70SH!CA S.'-AFVDS S P,-IRD CJ!IIVD OUR E 111"N THE,`, SY~_' CE
OF CC r,'PLL i E S,rl lSFACTICN EVERYTHINS WE 00 CONTRIHUT=S 71-0 FMA,7 GOAL FF0i'✓i SETT I VG TIIE NDLISTRY
STAND,4RD FOR RESEARCH AND DEVFLOPA,IENT TO PROVIDING INSTANT ACCESS 1-0 10SHICA SSIJPPON ERS NNL LOC;~
AROUND NOTHING COA4PA1", ES TO TOS/ IIGA QUALITY GUARANTEED
NO ME PRMTe NO STMMGS MACHE®, HERE'S HOW THE GUARANTEE WORKS.
I FE- E'P PCL i'T
If your Copier, Facsimile, Printer or its accessories do not operate within TABS' producl 5ljecif cations dui rng the term
of this program, and if the equipment cannot be repaired to perforrrr within product sor ClWcahuris. TABS will replace
the Copier, Facsimile, Printer or accessory at no charge with a model of equal or better fealur('s and specifications.
R E _GH'E
If your Copier, Facsimile or Printer is out of -service moie than two (2) consecutive business days after notifying your
Authorized Toshiba Servicing Dealer or requires off-site service, a loaner Copier, Facsimile or Printet will be provided
by the Authorized Toshiba Servicing Dealer at no additional charge
"°;~'3 i
The term of this program is a) for purchased equipment, three years from equipment installation date or maximum
number of copies as stated in the product specifications, whichever occurs first: or b) for leased or rental equipment,
three years or the length of the original lease starling from the equipment installation date, whichever is longer.
TERMS & CONW l®NS.
This program applies only to new Copier, Facsimile, Printer equipment and/or accessories acquired by customers froln
TABS or an Authonxed Toshiba Dealer on or after Apl it 1, 1996; on condition that the equipment a) was continuously
maintained under a lull service maintenance agreement provided by an Authorized Toshiba Dealer, and b) only genuine
Toshiba parts and consumable supplies are used in the maintenance and operation of the equipment, This program
is non-transferable. Equipment damaged or destroyed because of customer's negligence, misuse or abuse, improper"
electrical power or an act of God are not covered under this program If an Authorized Toshiba Servicing Dealer is not
available to fulfill tine terms of This program, TABS will esolve any program issues within a seasonable period of ;irn Ito
modificat on or extension of this program Is effective unless t is in writing and si;ned by tic, Sen or Vice President, Sales,
Marketing & Business Operations, Electronic Imaging Division
First, notiiv your Authorized Toshiba Servicing Dealer of he problem if your Copier. Facsimile, Priniei or its accessories
do not operate within TABS' product specifications during the term of this program, and if the equipment cannot be
repaired to perform within pYoduct specifications, send a certified letter documenting your problem acid n ropy 1the
dated sales receipt to
IUSl-f1BA Ai%AFRICA BUSINESS SO'-_UTIONS. INC, Electrons !maSinK Division, Director of ~,Id Semi e. 2 iJjsi Irvice. ;A 9261 8-1 631
Leading Innovation
Corporate Office: 2 fsusic: Rine. CE, Min a -c o-1631
East Coast. Hsu ~ -6 =E_t D— F~ccr, ~arsDDary. ! rs_; CIC5" f~l 1X16 ~C
Midwest. 8770 r/ Errs fjav.r Suite 700, C- I nc!s E06`1 1 sal r _ r38- C C`C Fa; 73r_c0 o0 77
South. bCC ~eccntr~e IrjJus`ria 6d . Sur, n10. i'I ir_r ss. 30 32- 1_I 7/70/2'-G_ ar 770/21'-9-85n,',
west Coast: 1-2 Tech-: S-i t 150, -VIF 9, Califs nl 52518 TI 9Cc 623° 7Ex ','-,9'-i3'--_7000
Web Site: N ar Toshiba cm or x tosnica corn
G f,2008 -os Ili, America B rsrness Soluoons. Inc , - I-ctrornic Ir ragir:p, C v sson
7j
June 2, 2010
SUBJECT: ADOPTION OF RESOLUTION APPROVING AN APPLICATION FOR PROPOSITION 84
NATURE EDUCATION FACILITIES COMPETITIVE GRANT FUNDS FOR GRACE
HUDSON MUSEUM & PARK.
Background & Discussion: City staff has identified the Proposition 84 Statewide Nature Education
Facilities Program as a possible source of funding for the renovation and development of Carpenter
Hudson Park. The Nature Education Facilities Program specifically funds construction and renovation of
facilities which "combine the study of natural science with preservation, demonstration and education
programs... provide collections and programs related to the relationship of Native American cultures to the
environment".
Staff has a series of elements and structures identified for the project. The large components include
fencing the park area to make it an extension of the museum facility and installing plant material related to
basketry and Native American uses. The museum currently has a small native plan courtyard. With
appropriate grant funds the function of the existing courtyard would be expanded into the park and create
an outdoor exhibit. The outdoor features will educate visitors about the uses of plants and sustainable
practices. The outdoor space will also provide an area for group presentations, picnics and events.
The City acquired the museum park property with a deed stipulation that the land would be utilized for the
purposes of an art and history museum. With adequate funding the City could maintain this commitment
and include the park space as a teaching element of the museum.
The grant application requires the attached resolution to be included with the application (Attachment #1).
The grant application is due by July 1, 2010. There is no match component required for these funds. The
request for funds includes continued design and planning work. If grant funds are awarded, staff will seek
direction from Council to continue the design process and incorporate additional community involvement.
Fiscal Impact:
H Budgeted FY 08/09 F-1 New Appropriation ® Not Applicable Budget Amendment Required
Amount Budgeted Source of Funds (title and Account Number Addtl. Appropriation Requested
Recommended Action(s): Adopt the resolution authorizing the application to the Proposition 84
Statewide Nature Education Facilities Program for Grace Hudson Museum and Park.
Alternative Council Option(s): Determine the application to the Proposition 84 Program is
inappropriate at this time and do not move to adopt the resolution.
Citizens advised: N/A
Requested by: N/A
Prepared by: Katie Merz, Community Services Supervisor, Sherrie Smith-Ferri, Museum Director
Coordinated with: Sage Sangiacomo, Assistant City Manager
Attachments: 1.Resolution Approving Application for Grant Funds
Approved:
Jane umbers, City Manager
Attachment #1
Resolution No:
RESOLUTION OF THE
CITY COUNCIL OF THE CITY OF UKIAH
Approving the Application for
NATURE EDUCATION FACILITY PROGRAM FUNDS
Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coastal Protection Bond Act of
2006
WHEREAS, the State Department of Parks and Recreation has been delegated the responsibility by the
Legislature of the State of California for the administration of the Nature Education Facilities Program,
setting up necessary procedures governing the Application; and
WHEREAS, said procedures established by the State Department of Parks and Recreation require the
applicant to certify by resolution the approval of application(s) before submission of said application(s) to
the State; and
WHEREAS, the applicant will enter into a contract with the State of California to complete the PROJECT;
NOW, THEREFORE, BE IT RESOLVED that the Ukiah City Council hereby:
Approves the filing of an application for the Grace Hudson Cultural Center, and
1. Certifies that said applicant has or will have available, prior to commencement of any work on
the project included in this application, the sufficient funds to complete the project should this
grant be awarded; and
2. Certifies that the applicant has or will have sufficient funds to operate and maintain the project;
and
3. Certifies that the applicant has reviewed, understands, and agrees to the General Provisions
contained in the contract shown in the Grant Administration Guide; and
4. Certifies that this project is consistent with the applicable city or county, or appropriate planning
document, as the case may be; and
5. Delegates the authority to Citesesaer to conduct all negotiations, sign and submit all
documents, including, but not limited to applications, agreements, amendments, and payment
requests, which may be necessary for the completion of the project; and
6. Agrees to comply with all applicable federal, state and local laws, ordinances, rules, regulations
and guidelines.
Approved and adopted the day of , 20
I, the undersigned, hereby certify that the foregoing Resolution Number was duly adopted by the
Ukiah City Council following a roll call vote:
Ayes:
Noes:
Absent:
(Clerk or Board Secretary)
7k
June 2, 2010
SUBJECT: AUTHORIZE THE REPAIR OF ELECTRIC UTILITY TRUCK #2121 BE INCREASED IN
THE AMOUNT OF $3331.14 FOR A TOTAL OF $22,331.14. (EUD)
Background: On April 21, 2010, Council approved the repair of the Electric Utility Department's
Digger-Derrick truck (no. 2121) in the amount of $19,000.
During repairs by Terex Utilities Inc., the mechanic in charge of facilitating replacement of the
rotational bearing cited metal shavings inside the gear box. This gear box works in conjunction with
the rotational bearing to rotate the boom of the truck. This condition requires the gear box to be
rebuilt and is highly recommended by Terex Utilities Inc.
Because of this unforeseen condition and the repair is cost effective, staff recommends authorizing
the funding for repairs. Timeframe for this additional repair is approximately 14 days.
Fiscal Impact:
Not Applicable Budget Amendment Required
A Budgeted FY 09/10 ❑ New Appropriation
7
Amount Budgeted Source of Funds (title and Account Number Addit. Appropriation Requested
$30,000 Vehicle Repair 800.3765.303.000
Continued on Page 2
Recommended Action(s): AUTHORIZE THE REPAIR OF ELECTRIC UTILITY TRUCK #2121 BE
INCREASED IN THE AMOUNT OF $3331.14 FOR A TOTAL OF $22,331.14. (EUD)
Alternative Council Option(s): Provide further direction to staff.
Citizens advised:
Requested by: Mel Grandi, Electric Utility Director
Prepared by: Colin Murphey, Electric Supervisor
Coordinated with: Jane Chambers, City Manager; Gordon Elton, Director of Finance; Jan Newell,
Finance Controller
Attachments: Terex Estimate
Approved:
Jan Chambers, City Manager
TEREX Utilities
1143 Blumenfeld Dr. 916-221-4244/424o Telephone
Sacramento, Ca 95813 916-563-0465 Facsimile
Company:
Attention:
Phone:
Fax:
707-467-2826 Model #
Serial #
Work Order #
ATTACK'-
Date:
5/20/2010
PJ 300
5221287046
040-133631
Line
Item Scope of Work Labor Parts
1 REBUILD ROTATION GEAR BOX $824.00 $2,200.00
ESTIMATED FREIGHT $50.00
Estimate based on performing repairs at T.U. Sacramento
Labor $824.00
Parts $2,250.00
Tax (Estimate) $ 257.14
Total $3,331.14
NOTE: Parts and labor may vary due to bidden unknowns found at disassembly. Customer will
be notified of additional parts and / or labor required to complete repairs. This estimate does
not include tax, freight, travel, shop supplies / miscellaneous charges.
These prices are in effect for 30 days.
Thank you for the opportunity to provide this estimate. If you have any questions, please don't hesitate to
call.
Sincerely,
Charles Meredith
Service
Terex Utilities
Sacramento, CA
charle: means terex.com
Approval / Authorization for Terex Utilities to perform above selected repairs, please sign below and
fax back to 916-563-0465. Please include a Purchase Order and or Credit Card number.
* Signature
Purchase Order #
Date
Credit Card # V Code # (3 digit code on back of card)
Exp Date Name on card
City al z-fk-jvh
ITEM NO.: 71
MEETING DATE: June 2, 2010
AGENDA SUMMARY REPORT
SUBJECT: APPROVAL OF NOTICE OF COMPLETION FOR THE DISTRIBUTION POLE
REPLACEMENT PROJECT, SPECIFICATION NO. 09-11 AND APPROVAL OF FINAL
PAYMENT OF THE 10% RETENTION TO PAR ELECTRICAL CONTRACTORS. (EUD)
The City Council awarded the contract for the Distribution Pole Replacement on August 5, 2009 to Par
Electrical Contractors, in the amount of $463,036.00. The contract was for replacement of 120 power
distribution poles.
During the course of the project, Council approved Change Order #1 on January 20, 2010 for $66,368.44 to
replace an additional 15 poles. In addition, two change orders were approved by Staff to cover expenses
related to the project that were within the 10% contingency allowed for additional work.
The work was completed by the contractor in conformance with the approved plans and specifications on
May 19, 2010. The final contract cost, reflecting approved change orders, is $575,217.80. Final payment of
the 10% retention will be made to the Contractor after 30 days from the date the Notice of Completion is
filed with the County Recorder (Attachment #1).
Fiscal Impact:
X I Budgeted FY 09/10 ❑ New Appropriation
Amount Budgeted Source of Funds (title and
$575,114.30 Overhead Maintenance
Not Applicable 1-1 Budget Amendment Required
Account Number
800.3728.800.000
Recommended Action(s):
1. Accept the work as complete
2. Direct the City Clerk to file the Notice of Completion with the County Recorder for the Distribution
Pole Replacement Project, Specification No. 09-11.
Alternative Council Option(s): Determine the work is not complete and/or remand to Staff with
direction.
Citizens advised: N/A
Requested by: Mel Grandi, Electric Utility Director
Prepared by: Cindy Sauers, Contract Electrical Engineer
Coordinated with: Jane Chambers, City Manager
Attachments: Notice of Completion
Approved: ~Ii~ ifLA 1-~
Jane C mbers, City Manager
A E I
Please return to:
CITY OF UKIAH
300 Seminary Avenue
Ukiah, California 95482-5400
(707) 463-6200
NOTICE IS HEREBY GIVEN:
NOTICE OF COMPLETION
1. That the real property described is owned by the following whose address is: City of Ukiah, a Municipal
Corporation, 300 Seminary Avenue, Ukiah, California 95482-5400
2. That the nature of the title to the Distribution Pole Replacement Project, Specification No. 09-11 of all said
owners is that of fee simple.
3. That on the 19th day of May 2010, the Contract work for this project was actually completed.
4. That the name and address of the Contractor is Par Electrical Contractors
5. That the real property herein referred to is situated in the County of Mendocino, State of California, and is
described as follows: City-owned property identified as various power poles within the City of Ukiah.
I hereby certify under penalty of perjury that the forgoing is true and correct:
City Council Approval CITY OF UKIAH, a Municipal Corporation
By
Date JoAnne Currie, City Clerk Date
State of California
County of Mendocino
Oily of `ZlC°afi
ITEM NO.: 7m
FETING DATE:
AGENDA SUMMARY REPORT
June 2, 2010
SUBJECT: MENDOCINO SOLID WASTE MANAGEMENT AUTHORITY (MSMWA) ANNUAL
REPORT, BUDGET REVIEW OF FISCAL 2009/2010, AND PROPOSED BUDGET FOR
FISCAL 201012011
Background: Pursuant to the joint powers agreement, the Board of Commissioners of the Mendocino
Solid Waste Management Authority (MSWMA) adopts a proposed budget for the upcoming fiscal year and
refers it to the member jurisdictions for any comment.
Discussion: Attached are MSWMA's annual report and proposed budget for Fiscal 2010/2011 for
City Council's review and possible comment. Budget Adoption is scheduled for June 23, 2010.
Fiscal Impact:
H Budgeted FY 08/09 7 New Appropriation 17X Not Applicable Budget Amendment Required
Recommended Action(s): Accept the Report.
Alternative Council Option(s): Remove from Consent Calendar to discuss/comment.
Citizens advised:
Requested by: Jane Chambers, City Manager
Prepared by: Linda Brown, Exec Asst. to the City Manager
Coordinated with:
Attachments: MSMWA Annual Report/Budget Review
Approved:
Jan ambers, City Manager
Mendocino Solid Waste
Management Authority
A joint powers public agency
Michael E. Sweeney
General Manager
P.O. Box 123
Ukiah, CA 95482
(707) 468-9710
sweeney@pacific.net
May 19, 2010
Jane Chambers, City Manager
City of Ukiah
300 Seminary Avenue
Ukiah, CA 95482
RE: MSMWA Annual Report & Budget Review
Dear Jane:
CITY UKIAH
MAY 2 0 2090
CITY CLERK DE4TMENT
The MSWMA Board of Commissioners approved a proposed 2010-11 fiscal year
budget on May 13, 2010.
Under the Joint Powers Agreement, the proposed budget is transmitted to the
member jurisdictions for their comment. Any comments are presented to the
MSVVMA Board, which then considers the budget for final adoption. This is
planned for the MSWMA Board meeting on June 23, 2010.
The proposed budget, with a brief annual report, is attached for your
consideration. I would be happy to appear before the City Council to answer any
questions and receive comment.
enclosure
cc: Doug Crane
Mendocino Solid Waste Management Authority
Annual Report / Budget eve
May, 2010
I -
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PST
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GRAFFITTI ABATEMENT: MSVVMA's illegal dumping cleanup program has
expanded to include rapid-response to graffitti; using our recycled latex paint.
MSWMA also makes our paint available to other groups combating this urban blight.
MSWMA 2010 annual report & budget review - page 1
SWIVIA_assumed contract administration duties for County of Mendocino
pursuant to a memorandum of Understanding. Transfer station operators became
electronics collectors at their sites, diverting substantial MSWMA income for
electronics, and the MSWMA. surcharge was increased from $4.50 to $5.00 per ton
to backfill for part of this loss. Planning for a new site for the azMobile base
facility moved forward. An austerity budget is planned for 2010-11 to allow
continuation of MSWMA services within available resources.
Program.
az oile. Our three-county household hazardous waste service (Mendocino, Lake
and northwestern Sonoma) registered a total vehicle count of 7,671 in 2009, an increase
of 508 from the previous year. The azMobile is staffed by four full-time technicians.
To reduce crowding at collections, customers are encouraged to visit the permanent oil
drop-offs and use the HazMobile only when they have other hazardous wastes to dispose
of. More customers are learning how to do this and avoiding the need to come to a
HazMobile collection.
Court contract ad mien stra io . In August, 2009, the County of Mendocino asked
MSWMA to assume administration of the 11 County's solid waste franchise and hauling
contracts: A Memorandum of Agreement took effect October 20, 2009. The MSWMA
General Manager now has the additional duty of County Solid Waste Director. The
County pays MSWMA $99,572 annually for the service. The principal.use of the new
revenue by MS WMA has been employment of an office manager who works on
MSWMA administrative tasks and also County contract monitoring.
Paint recycling continued to be a popular program in 2010 with 8,140 gallons of
discarded latex paint received by.the HazMobile, processed by MSWMA for reuse and
distributed free to the public. Fernand for our paint exceeds supply. In addition,
MSWMA operates a "Free Store" at our base facility in Ukiah for household products
received by the HazMobile that are reusable in their original containers.
Electronics recycling changed substantially because the private operators of the
Ukiah and Willits Transfer Stations` took over the fdnction'as "collector" at their facilities
which entitled them to receive the state reimbursements formerly paid to MSWMA. This
reduced MSWMA income significantly and caused the SWMA Board of
Commissioners to increase the surcharge from $4.50 to $5.00 per ton effective January 1,
2010. This partially replaced the lost revenue.
MSWMA 2010 annual report & budget review - page 2
Appliance hazardous waste removal continues to be a major activity that requires
considerable allocation of MSWMA resources. Our staff removes freon refrigerants,
lubricating oils, and mercury-containing switches from appliances. MSWMA provides
this service at no charge to the transfer stations, in order to reduce the cost to the public
of disposing of old appliances.
Sharps disposal is a new program established by MSWMA in 2008. In cooperation
with the transfer stations, MSWMA will provide a free disposal drop-off for sharps.
Illegal dump cleanup requires consistent attention to prevent an accumulation of trash
on county roads. Numerous citizen complaints of dumping are referred to MSWMA each
year. MSWMMA carried out 230 roadside illegal dumping cleanups in 2009. In addition,
MSWMA carries out larger cleanup projects like the railroad right-of-way north of
Ukiah. MSWMA has acquired specialized equipment and techniques to safely deal'with
dumping on steep slopes.
Trailerl o or home demolition is a service provided by MSWMA to support the
County Abandoned Vehicle Abatement Program.
Reporting, planning compliance with complex state requirements on waste
diversion has been provided by MSWIVIA. for our member jurisdictions since 1992. This
includes filing the annual reports to the CI , filing time extension applications, and
most recently, assisting the City of Fort Bragg and County of Mendocino in the central
coast transfer station siting project. MSWMA also assists member jurisdictions in
contract issues with franchised haulers and transfer station operators, upon request.
Free tire recycling using state grant funding is another MSWMA program that helps
control illegal dumping. This annual event at four disposal sites around the county
collects about 8,000 tires without charge for recycling. A new grant for $19,234 was
received for free tire collection events in 2010.
Recycling information promotion has been provided by MSWMA since 1992 to
help the public take advantage of waste diversion programs and help the jurisdictions
comply with state recycling mandates. Our printed Recycling Guide was updated and
reissued, in addition to the toll-free Recycling Hotline and website
www.MendoRecycle.org. MSWMA's office manager serves a our recycling outreach
representative.
Site development for our new HazMobile base facility at 3200 Taylor Drive, Ukiah
began. A geotechnical survey was carried out by SHN in early 2010. The next step is
facility design.
MSWMA 2010 annual report & budget review - page 3
Organization mmm mm mm mmmmm m m m mmm mm mmmmmmmmm
The Mendocino Solid Waste Management Authority is a joint powers authority
established in 1990 by the County of Mendocino, City of Ukiah, City of Fort Bragg and
City of Willits, for the purpose of carrying out activities of mutual benefit, in the solid
waste field. MSWIVI is governed by a Board of Commissioners consisting of two
county supervisors and one councilmember from each city. Current board members are:
Douglas Crane, City of Ukiah (chair)
Meg Courtney, City of Fort Bragg (vice-chair)
Victor Hanson, City of Willits
John McCowen, County of Mendocino
John Pinches, County of Mendocino
MSWMA. has six full-time employees--a general manager, four hazardous waste
technicians, and an office manager.
2009-10 Budgfet
The MSWMA Board approved a proposed 2010-11 budget on May 13, 2010, and
referred it to the member jurisdictions for comment. This is an austerity budget that
includes no pay increases, an increase in employee co-pay for the health insurance
premiums, and reduction in the MSWMA contribution to the pension SEP- . A one-
time item is payment of an OSHA fine of $13,000 for an accident that occurred in 2007.
A funds management change was made in 2009. 'In 2007 the County Auditor-Controller
began billing MSWMA, like all special districts, an "A-87 cost allocation" fee on all
transactions processed by the County. In 2008-09 these charges were $23,465. In order
to reduce this expense, the Board of Commissioners decided that MSWMA would
withdraw working capital from the County Treasurer and place it in a commercial bank
account at Savings Bank of Mendocino, to use for routine deposits and disbursements.
MSWMA is realizing a net savings of about $18,000 per year from this change.
The following 4 pages contain:
1. Proposed MSWMA revenue budget
2. Proposed MSWMA expenditure budget
3. Income & expenditure detail notes
MSWMA 2010 annual report & budget review - page 4
Revised 2009-10
budget
Proposed 2010-11
budget
1
Coup services payment
66,381
99,572
2
Employee health premiums
4,200
3
Electronics recycling income
62,426
0
4
II W service
150,000
150,000
5
Interest
2,084
2,000
6
Recycling block ant
0
25,000
7
Revenue, misc.
3,000
5,000
8
Sales, compost bin
2,000
1,000
9
Surcharge
280,000
310,000
10
Tire Grant income
15,463
16,000
11
Used oil block ant income
30,983
30,000
12
Transfer from reserve fund
1,277
12,000
13
Sale of surplus truck
10,000
0
14
Willits Transfer station contract fee
7,000
15
TOTAL INCOME
623,614
661,772
MSWMA 2010 annual report & budget review - page 5
EXPENDITURES
Revised 2009-10
budget
Proposed 2010-11
budget
16
Advertising
3,000
3,000
17
Audit
4,600
4,600
18
CPSC dues
0
100
19
Compost bin purchases
6,022
0
20
Coun A-87 service charges
23,465.
3,000
21
Electronics recycling costs
262
0
22
Fuel
6,500
6,500
23
Health insurance
42,500
51,756
24
HHW disposal expense
112,000
100,000.
25
HHW facility costs & development_
1,277
12,000
26
HHW supplies
19,000
16,000
27
Illegal dum fees & cleanup costs
24,000
22,000
28
Liability insurance
16,376
16,000
29
Miscellaneous
5,000
5,000
30
OSHA penalty
13,000
31
Office supplies
7,000
7,000
32
Oil ant expense
5,000
5,000
33
Payroll expense, regular
261,604
266,000
34
Payroll, Used Oil Recycling Grant
27,000
27,000
35
Pension SEP-IRA
22,439
16,400
36
Pollution insurance
7,587
7;600
37
Postage
600
600
38
Printing
3,000
2,000
39
Rent
4,800
4,800
40
Sales tax
- -209
0
41
Tele hone communications
5,500
5,500
42
Tire rec clip amnesty collections
14,583
16,000
43
Training fees
3,500
3,000
44
Transfer to depreciation reserve
14,000
14,000
45
Vehicle maintenance
4,500
4,000
46
Vehicle mileage
5,000
5,000
47
Worker's com ensation insurance
18,000
22,000
48
TOTAL EXPENDITURES
668,324
658,856
49
NET
-44,710
2,916
Fund Balances, May 6, 2010:
General Fund: $353,469
Reserve Fund: $162,584
Equipment Reserve: $65,299
MS WMA 2010 annual report & budget review - page 6
a
INCOME NOTES
1. Electronics Recycling Income. As a registered collector with the state, MSWMA receives
per-pound payments for CRTs shipped.
2. Farm Ranch. Cleanup Grant Income. No grants currently pending.
3. IIHW Service. Lake and Sonoma Counties pay MSWMA the full cost of HazMobile
service to their citizens. MSWMA additionally bills business customers in Mendocino
County a pass-through rate for their hazardous waste, and residential customers for any waste
in excess of 15 gallons per day. This item is steady.
4. Interest. MSWMA funds are split between Savings Bank of Mendocino (active checking
account) and the County Treasurer (reserve fluids). Interest is paid by both.
5. Lake County outreach contract. Put on hold by state in April, 2009. Future uncertain.
6. Recycling Block Grant. MSWMA pools the State Department of Conservation Recycling
Grants to its member agencies and uses them in a unified program for promotion of beverage
container recycling within the grant's limitations. We apply these funds to salary costs for
our bilingual outreach worker.
7. Revenue, misc. Includes payments for trailer/motor home recycling and other items.
8. Sales, compost bin. Through three participating recycling centers, MSWMA sells backyard
compost.bins to the public at cost.
9. Surcharge. MSWMA's core funding is $4.50 per ton paid by disposal sites on all waste
going to landfills. The surcharge was established at $6.00 per ton in 1992 and was reduced
in three steps to its present level. In inflation-adjusted dollars, the surcharge is far less than
one-half its original amount.
10. Tire grant income. MSWMA gets state grants that pays most of the cost of a free tire
recycling program. A new grant is anticipated for fall 2009.
11. Used oil block grant income. MSWMA pools the allocations to its member agencies under
this CIWMB grant program and uses the fiends for oil recycling and qualifying Hazlvlobile
oil `recycling costs.
12. Transfer from Equipment Reserve. Used to buy new rolling stock. No new purchases
anticipated for 2008-09.
13. Transfer from reserve fund.
14. Sale of surplus truck. 1999 Chevrolet 14' flatbed with lift gate now.offered for sale. This
was made surplus by acquisition of new Ford F-550 flatbed.
EXPENDITURE NOTES
16. Advertising. Print, radio and banner expenditures not chargeable under other lines.
17. Audit. Annual outside audit of MSWMA finances. -
8. Compost bin purchases. Compost bins sold to public at cost in cooperation with three
recycling centers. We still have inventory so no re-order is included at this time.
19. County A-87 service. charges. Share of Information Services, Auditor, and other
departments that provide services to MSWMA as a Special District.
20.. Electronics recycling costs. Future costs will be a deduction from income.
21. Fuel. MSWMA operates three diesel=powered trucks.
22. Health insurance. Blue Shield plan for MSWMA's six full-time employees.
23. IIHW disposal expense. Primarily for a hazardous waste management contractor who
removes packaged hazardous waste from MSWMA's base facility, and empty drums and
MSWMA 2010 annual report & budget review - page 7
supplies delivered by the same truck. Also pays recycling expense for certain other items
through other vendors including fluorescent tubes and antifreeze. This item continues to increase
due to new state regulations on fluorescent tubes and household batteries.
24. - facility costs A development Development planning will be in-house for 2009-10.
25.` supplies. Materials not supplied under fine.22.
26. Illegal dump fees & cleanup costs. Includes materials and equipment costs for roadside
cleanup and major cleanup`projects including Farm Ranch grant-funded work. Also includes
MSWMA reimbursement of dump fees to individuals and groups that do volunteer cleanups, and
MSWMA expenditures for trailer & motor home =demolition.
27. Liab°"ty insurance. $10 million general and vehicle-liability coverage through Special
District Risk Management Authority.
28. ° ceilaneous.
29. Office supplies. Covers office materials' used by HazMobile, General. Manager and
Recycling` Outreach Specialist:
30. Oil. g-rainit ez ense. Oil recycling charges and some HazMobile advertising paid under
Used 011 Block Crrant.
31. Payroll'e' ense, regular- ° Wages, salaries-, and payroll taxes not covered under lines 31 or
32.
32. Payroll,; Used Oil Recycling Grant. Technician wages during HazMobile collection
activity:.
33. Payroll, Recycling Block Grant. Recycling Outreach Specialist wages for beverage
contaiier recycling promotion paid under using this grant.
34.' Pension; SEP-ERA. .MSWMA`makes an IRA contribution for all employees who have at
least .3 years' service, equal to a percentage of their gross earnings.
35. Pollution insuranceo $1 million insurance for pollution liability.
'36. Postage.
37. Printing. Annual recycling guide, door hangers, other literature.
38.: -Sent. MSWIAN office.
39. Sales tax. Tax on compost bin sales.
40. Telephone (communications). Telephones, internet access, website hosting, website
maintenance.
41. Tire recycling amnesty collections. Expenses charged under the Tire Recycling Grant.
(Some reimbursement of Payroll Line is also secured from this grant.)
11 Training fees. OSHA-mandated' safety classes provided for MSWMA staff.
3. Transfer to depreciation reserve. Depreciation set-aside for equipment replacement.
44. Truck acquisition. No new purchases anticipated.
5. Ve °cle maintenance. For MSWMA's three trucks and three trailers.
6. Vehicle mileage. Covers use of personal vehicle for MSWMA business by General
Manager and Recycling Outreach. Specialist; paid at county mileage rate.
7. Worker's compensation insurance, Provided by Special District Risk Management
Authority.
a
MSWMA 2010 annual report & budget review -page 8
SUBJECT: AUTHORIZATION FOR CITY MANAGER TO NEGOTIATE AND EXECUTE AN UPDATE
TO THE MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF UKIAH AND
UKIAH UNIFIED SCHOOL DISTRICT.
Background & Discussion:
The City of Ukiah and the Ukiah Unified School District have formed a long and mutually beneficial
partnership to maximize the use of the community's facilities managed by each agency. Each entity makes
available to the other party, facilities to support the recreation/sport programs and/or community meetings
they each organize and conduct. The success of many programs relies on the use of shared facilities.
The attached draft Memorandum of Understanding has been reviewed by the City Attorney and is under
review with the Ukiah Unified School District Board.
There is no fiscal impact associated with the attached Memorandum of Understanding as the agreement is
a reciprocal use agreement. Furthermore, each agency is required to hold the other harmless/indemnify
and provide the appropriate level of insurance. Staff recommends that Council authorizes the City
Manager to negotiate and execute an update to the Memorandum of Understanding between the City of
Ukiah and the Ukiah Unified School District.
Fiscal Impact:
Budgeted FY 08/09 F-1 New Appropriation ® Not Applicable Budget Amendment Required
F
H
Recommended Action(s): Authorization for City Manager to negotiate and execute an update to the
Memorandum of Understanding between the City of Ukiah and Ukiah Unified School District.
Alternative Council Option(s): Determine that an update to the Memorandum of Understanding is not
appropriate at this time and remand staff with further direction.
Citizens advised: N/A
Requested by: N/A
Prepared by: Stephanie Young, Maya Simerson and Katie Merz, Community Services
Coordinated with: Sage Sangiacomo, Assistant City Manager
Attachments: Draft Memorandum of Understanding
Approved: _ -
Jane ambers, City Manager
ATTACHMENT
AGREEMENT FOR JOINT USE OF FACILITIES
This Agreement is made and entered on the day of , 2010, in Ukiah,
California, by and between the City of Ukiah ("City"), and Ukiah Unified School District
("District").
RECITALS:
1. City operates a year round community recreation program that includes youth
basketball, girls' softball, adult co-ed volleyball and softball, men's softball, summer day camp,
and a variety of special interest classes for adults and children such as dance, fitness, arts and crafts,
music, language, and cooking classes ("City recreation programs").
2. District organizes golf, swimming, and baseball classes and teams and has occasional
use for public meeting spaces in addition to those available on its campuses ("District recreation
programs").
3. The parties have determined that it is in their mutual interest, subject to the terms and
conditions as further stated herein, to exchange the use of certain facilities owned and maintained
by them to support the recreation programs they each organize and conduct.
AGREEMENT:
In consideration of the above-recited facts and the terms and conditions as further stated herein the
parties hereby agree as follows:
1. Subject to the terms and conditions set forth in paragraph 3, the District shall make
available to City for its use in conducting City recreation programs its gymnasiums, multipurpose
rooms, class rooms, tennis courts, swinuning pool facilities, and football, softball, soccer and
baseball fields.
2. Subject to the terms and conditions set forth in paragraph 3, the City shall make
available to District for classes, sports teams and public meeting spaces, its golf course, swimming
pool facilities, Anton Stadium, park facilities, Todd Grove Clubhouse, Grace Hudson Museum
meeting room, and Civic Center Council Chamber.
3. Except where special conditions are otherwise stated, the parties shall make their
facilities available to each other in accordance with the following terms and conditions:
a. Each party shall have the use of the facilities without charge, except that each party may
charge the other a facilities maintenance fee, if the time and expense to clean and prepare the
facility for reuse exceeds a reasonable amount, normally expected from routine use of the facility.
As to each facility the parties shall agree to leave the facility clean and each party is to have
performed general maintenance reasonably expected of the party using the facility pursuant to this
agreement and the amount reasonably expected of the owner of the facility. Any bill under this
subparagraph for a facilities maintenance fee shall itemize the time, hourly rates and expenses
included in the bill. Each party using the facility of the other shall pay all costs associated with
repairing any damage to the facility caused by that use, normal wear and tear excepted. If either
party discovers such damage, it shall immediately notify the other and arrange a joint inspection of
the damage. Written notification shall be provided to the facility owner, the next calendar or
working day, whichever is later. Each party will designate, in writing, to the other party who the
recipient staff member(s) of the notification will be.
b. Any party's use of the other party's facilities under this Agreement shall not interfere with
the normal use of the facility by the owner. Each party shall have first priority for the use of the
other party's facility, after the facility owner. The parties shall schedule the use of such facilities
under this Agreement to avoid unnecessary inconvenience to each other and to provide reasonable
notice of their intended use of the facilities to each other. Care shall be taken in granting third
party use of gymnasium, multipurpose rooms and athletic fields so as not to interfere with
regularly programmed sports programs.
c. Each party shall exercise due care in providing adequate and legally required supervision
of its use of facilities under this Agreement. With respect to all facilities the use and supervision of
the activity shall comply with any requirements imposed by state- law or local regulation or policy,
provided the party using the facility has been furnished with a copy of the local regulation or
policy. The facility owner shall complete a use of facility document and provide the party using the
facility with a contact person and phone number who can be reached at any time while the facility
is being used. All use of facility documents must be signed by an authorized representative.
When either party uses the swimming pool facilities of the other party, the party using the
swimming pool facility shall provide not less than two lifeguards who must be on duty throughout
the entire time that the pool is used by that party, with the exception of the Ukiah Municipal Pools
where City of Ukiah lifeguards must be on duty. The cost of these lifeguards may be absorbed by
the City of Ukiah. The lifeguards must have current certifications required by state law and any
locally adopted regulation or policy. The number of lifeguards required shall be dictated by the
American Red Cross Guidelines and is currently at a ratio of one guard per twenty-five swimmers.
If the lifeguards are not supplied by the facility owner, the party using the facility must file current
lifeguard certifications with the owner before using the facility.
d. The party using the facility under this Agreement shall defend, indemnify and hold
harmless the facility owner from and against any claim for personal injury or property damage,
including death, arising out of that party's use of the facility, including, but not limited to, claims
based on the negligence or willfully wrongful conduct of the party using the facilities, or its
negligent or willfully wrongful supervision of the activity. This indemnification shall not include
injuries or damage resulting from a dangerous condition of the physical facility itself, unless (1)
the party using the facility discovers the dangerous condition and fails to notify the owner
immediately, in writing as noted in a. above, of that condition; or (2) the owner has provided the
party using the facility with prior written notice of the dangerous condition. The indemnification
2
provided under this subparagraph shall include all costs of defending against any such claim,
including, but not limited to, the fees of attorneys, experts, consultants and investigators. Each
party shall use reasonable efforts to secure from participants in City or District events at the other's
facility a waiver of liability in substantially the form contained in Exhibit B, attached hereto.
d. Prior to using any facility under this Agreement and as a condition precedent to its right
to use such facilities, each party shall provide the other party with proof of general comprehensive
liability insurance satisfactory to the other party with policy limits of not less than $5,000,000 per
occurrence and a general aggregate of limit of not less than $5,000.000. Each policy shall name
the other party as an additional insured as to any use of facilities under this Agreement. Coverage
under a memorandum of coverage issued by a joint powers agency to which the party belongs may
be used to comply with the insurance requirements in this subparagraph d.
4. This Agreement shall become effective upon the date first written above and remain in
effect until 30 days following a written notice of termination by one party to the other party.
5. Whenever notice is required by the provisions of this Agreement, it shall be deemed
given when deposited in the United States mail with proper postage affixed thereto or personally
delivered and addressed as follows:
UKIAH UNIFIED SCHOOL DISTRICT CITY OF UKIAH
Jane Chambers, City Manager
Ukiah Civic Center
300 Seminary Ave.
Ukiah, CA 95482 Ukiah, CA 95482
6. This constitutes the whole agreement between the parties concerning its subject matter
and supercedes and replaces any prior agreements, statements or understandings that may have
existed between the parties.
7. This Agreement may be executed in one or more duplicate originals and when so
executed each such duplicate original, bearing the original signatures of the parties, shall be
admissible in any administrative or judicial proceeding as proof of its terms.
WHEREFORE, this Agreement is made and entered on the date first written above.
DISTRICT
By:
Its:
UKIAH
By:
Its:
7o
6/2/2010
SUBJECT: UPDATE REPORT ON LOCAL EMERGENCY DECLARATION REGARDING DROUGHT
AND WATER SHORTAGE STATUS
Summary: In drought conditions, the City may declare a local emergency under the California Emergency
Services Act ("ESA"). In addition, the City Council under the Ukiah City Code may declare a Water Shortage
Emergency as a Stage I, II or III emergency. At its meeting of April 15, 2009, the City Council adopted a
RESOLUTION DECLARING A LOCAL EMERGENCY UNDER THE STATE EMERGENCY SERVICES ACT
AND A STAGE I WATER SHORTAGE EMERGENCY UNDER SECTION 3602 THE UKIAH CITY CODE.
(Attachment #1).
The resolution contains recitals setting forth the drought conditions and the response to those conditions by
the State, Mendocino County, the Sonoma County Water Agency and the State Water Resources Control
Board which the resolution seeks to address. Please refer to those recitals for details.
Subsequent to adoption of the resolution, City staff has responded further to the water shortage emergency by
replying to the Sonoma County Water Agency (SCWA) regarding actions that the City of Ukiah has taken, and
will be taking, to address water conservation. Attachment #2 is a copy of that letter. The letter outlined
actions that the City is taking, responded to SCWA's request for water use information, and included an outline
of the City of Ukiah's water conservation program for 2009.
As a result of the drought, the City Council has considered many different aspects of the water shortage issue.
Under Council's direction, staff has implemented a series of water conservation and education measures. In
addition, the City has a full time staff position dedicated to implementing these measures.
Water demand has decreased by 20.8% from the 2008 quantities and 19.0% as compared to the 2004
quantities. Staff assumes that this is as a result of our conservation efforts. This will affect our revenues and
staff is working on solutions for this issue as we analyze the fee study that is currently being prepared by an
outside consulting firm.
Developments from the SWRCB
On May 28, 2009, the State Water Resources Control Board (SWRCB) issued an amendment to Order WR
2009-0027-DWR, Order WR 2009-0034-EXEC. The amended order conditionally approves Sonoma County
Water Agency's (SCWA) petition to reduce the flow in the Russian River from July 6 through October 2, 2009
to 25 cubic feet per second (cfs) for the upper Russian River and 35 cfs for the lower Russian River if during
Continued on page 2
Recommended Action: 1. City Council receive the status report on water shortage emergency
Alternative Council Option(s): N/A
Citizens advised: N/A
Requested by: Jane Chambers, City Manager
Prepared by: Tim Eriksen, Director of Public Works and City Engineer
Coordinated with: Ann Burck, Deputy Director of Public Works, Water and Sewer Division
Attachments: Attachment 1 - Resolution
Attachment 2 - Letter to SCWA
Approved: _
Ja Chambers, City Manager
Subject: Drought and Water Shortage Status
Meeting Date: June 2, 2010
Page 2 of 2
the period from April 1 through June 30 total inflow to Lake Mendocino is less than or equal to 25,000 acre-
feet.
The amended order confirms a water conservation goal for Mendocino County of 50% (compared to 2004)
from April 6, 2009 until the expiration of this order (October 2, 2009), "By May 6, 2009, SCWA shall submit a
plan to the State Water Resources Control Board to obtain the cooperation and participation of agricultural and
municipal Russian River water user to reach a water conservation goal of 25 percent in Sonoma County and
50 percent in Mendocino County for the period of April 6, 2009 until the expiration of this order (October 2,
2009).
The amended order modified the original order issued on April 6, 2009. From July 6 through October 2, 2009,
minimum in-stream flow shall remain at or above 25 cfs, if Lake Mendocino storage is less than 65,630 acre
feet on July 1, 2009 (instead of total inflow to Lake Mendocino less than or equal to 25,000 acre-feet).
On October 27, 2009 the County of Mendocino Water Agency discussed the current water storage situation in
the Ukiah Valley. The discussion led to the consideration of repealing the County emergency order for all
water purveyors to limit water usage by 50%. The Agency was not comfortable with the language in the
repealing order as prepared by staff and requested staff to bring the order back for adoption at the next
regularly scheduled meeting. On November 3, 2009 the County of Mendocino retracted the 50% conservation
requirement. However, the Board of Supervisors recommended that each water district strive to achieve 25%
conservation on a voluntary basis. The City of Ukiah in the coming weeks must consider how to address this
voluntary request by the County of Mendocino.
On its regularly scheduled November meeting Millview Water District lifted water restrictions to their
customers. They have advised City Staff that this may change based on rainfall and other contributing
conditions.
Updated Staff Actions
Staff has continually monitored this issue in response to the City Council concerns about this emergency and
the length of time that it has been in effect. On December 16, 2009 City Council repealed the mandatory
water rationing, however, Stage I voluntary rationing is still in place. The lake storage has been steadily rising
since the middle of January and is now 86,400 acre-feet. However, the state is predicting a dry year so staff
recommends the continuation of the voluntary conservation measures. The recent rainfall has made a
substantial impact on the storage. It should be noted that the construction of the Oak Manor Well (well #8) has
started and it is anticipated that this well will be on line. The construction contract has been awarded by the
City Council.
Regional Issues
City Staff is also monitoring the Draft Ukiah Valley Area Plan Water Supply Assessment report. Many of the
local valley water purveyors are concerned with this report. It is hoped and presumed that the Board of
Supervisors will direct county staff to address some of the issues that have been submitted.
The Request for Proposal (RFP) for the master plan for reclaimed water has been drafted and reviewed by the
City Council. Staff has been meeting with stake holders for this system, as directed by Council and hope to
issue the RFP by mid June 2010. At this time staff is gathering comments from all other interested agencies.
ATr"ACHMENT--
WHEREAS,
1. Lake Mendocino and the Russian River are one current source of water for the City of
Ukiah and the primary source of water for other domestic and agricultural users of water in
Mendocino and Sonoma Counties; and
2. Average rainfall through March for the area contributing run-off to Lake Mendocino
is 42 inches and the rainfall total through March 2009 is 23 inches; and
3. There have been below average rainfall and reduced storage in Lake Mendocino in
2004, 2007 and 2008; and
4. Average rainfall for April - June is 4.8 inches; and
5. Even average rainfall for the remainder of the rainy season cannot compensate for the
extremely low rainfall this year; and
6. Labe Mendocino held approximately 53,000 acre feet on April 1, 2009, with a Lake
level of 727.63 feet; and
7. The average Lake storage in April is 84,448 acre feet, the Lake storage in April 2007
was 66,617 acre feet and the average Lake storage in October is 55,854 acre feet, more water at
the end of the dry summer season than is currently stored in the Lake; and
8. The historically low water storage level in Lake Mendocino this year is part of a
statewide water shortage caused by inadequate rainfall whichlas prompted Governor
Schwarzenegger to declare a statewide emergency under the Emergency Services Act due to
these drought conditions; and
9. Mendocino County has declared a local emergency due to drought conditions under
the Emergency Services Act; and
10. On April 6, 2009, the State Water Resources Control Board ("SWRCB'°) has
approved an Urgency Change Petition :died by the Sonoma County Water Agency ("SCWA°') to
reduce in-stream flows in the Russian River to 75 cfs from April 6-June 30, 2009 and to as low
as 25 cfs for the period July 1-October 2, 2009, if cumulative total inflow to Lake Mendocino is
equal to or less than 25,000 acre feet for the period April 1-June 30, 2009; and
11. The order approving temporary changes to the minimum in-stream flows required by the
appropriative rights permits issued to SCWA is subject to several conditions, including a condition
requiring the SCWA to submit a plan by May 6, 2009, to the SWRCB to 'obtain the cooperation
and participation of agricultural and municipal Russian River water users to reach a water
conservation goal of 25 percent in Sonoma County and 50 percent in Mendocino County for the
period of April 6, 2009 until the expiration of this order (October 2, 2009)"; and
12. A local emergency under the California Emergency Services Act (Government Code
§8550 et seq.) is defined in Section 8558(c) as the duly proclaimed existence of conditions of disaster
or of extreme peril to the safety of persons and property within the territorial limits of the City caused
by such conditions as drought which are or are likely to be beyond the control of the services,
personnel, equipment, and facilities of individual local governments and which require the combined
forces of other political subdivisions to combat; and
13. The historically low rainfall and water storage in Lake Mendocino qualifies as a local
emergency under the statutory definition; and
14. In a declared local emergency, local agencies may provide'mutual aid as needed pursuant
to agreements or resolutions, state agencies may provide mutual aid to local agencies pursuant to
agreement or at the direction ofthe Governor, costs incurred by the City in providing mutual aid
pursuant to agreements or resolution constitute a charge against the state, when approved by the
Governor in accordance with adopted regulations, and the City Council may promulgate orders and
regulations for the duration of the emergency to provide protection for life and property (see
Government Code 8631-86-34); and
15. In a declared local emergency, the City Council must review the state of the emergency
not less than every 21 days after first declaring the emergency, and
16. Under Uldah City Code Section 3602, the City Council may by resolution declare a
water emergency, specify the degree of emergency and place into effect the appropriate provisions of
Division 4, Chapter I, Article I I of the Ukiah City Code pertaining to a Water Shortage Emergency;
and
17. In a Stage I water emergency the Mayor shall issue a proclamation urging citizens to
institute such water conservation measures on a voluntary basis as may. be required to reduce
water demand to coincide with available supply; and
18. The City Council has already authorized the development of a groundwater well on
an emergency basis to provide the City with an additional water source this summer that does not
rely on the Russian River or water stored in Lake Mendocino; and
19. Stage II and III water emergencies impose various mandatory conservation measures
on City residents, including a prohibition on `!nonessential water use" in a Stage IT water
emergency and a limit on the daily use of water by different classes of water user in a Stage III
emergency; and
2
20. The City can declare a Stage H or Stage II emergency, if voluntary measures or less
sever mandatory measures does not achieve an adequate reduction in the use of Russian River
water or in water use generally to meet the available supply;
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Llldah hereby:
1. Declares a local emergency due to drought under the Emergency Service Act.
2. Declares a Stage I Water Storage Emergency under LTldah City Code Section 3602.
3. Directs the City Manager:
a. to identify and encourage the use as a Russian River water user of voluntary
measures to reach a water conservation goal of 50 percent for the period of April 6, 2009 to
October 2, 2009 C'Conservation Period7% and to report back tai the City Council at each City
Council meting field during that same time period on the measures identified, the means used to
encourage their use, the amount of water use reduction, and the status of the emergency
conditions;
b. to notify the City Council, if the City Manager determines that a Stage I Water
Emergency is not reducing water use to match the available supply and to recommend a Stage H
or III emergency, if necessary to achieve that level of water use;
c. at City Council meetings during the Conservation Period to recommend
temporary rules or orders to supplement or modify mandatory conservation measures in a Stage
H or III Water Storage Emergency to reduce water use to the available supply and to achieve the
conservation goals in Order WR 2009-0027-DWR. issued by the Division of Water Rights of the
State Water Resources Control Board;
c. to work with other local governments in the County, including the incorporated
cities and county water districts, to preserve as much water as possible for use during the dry summer
months and for the fall return of Chinook Salmon to the Russian River; and
d. to coordinate mutual aid efforts to address the local emergency between and among
political subdivisions in Mendocino and Sonoma Counties and state agencies.
PASSED AND ADOPTED on April 15, 2009, by the following roll call vote:
AYES: Councilmembers Landis, Thomas, Crane, Rodin, and Mayor Baldwin
NOES: None
ABSTAIN: None
ABSENT: None
Philip E. aldwin, Mayor
ATTEST-
7ity Clerk
3
e
April 28, 2009
Lynn Florey
Sonoma County Water Agency
Principal Program Specialist
P.O. Box 1] 628
Santa Rosa, CA 95406
Dear Ms. Florey;
This letter is written in response to your letter dated April 17, 2009. I do not know when
your letter was received by the City of Ukiah, but it arrived at our water treatment plant
rather than in my office at City Hall. The letter was just brought to my attention late
yesterday.
I had been expecting a request to respond to Sonoma County Water Agency for
information related to the State Water Resources Control Board's ruling, and, therefore,
am making an effort to meet your deadline of today's date. In future, it would be helpful
if you could copy and/or address critical dated correspondence about these current
drought conditions directly to my office, as that will assist us in making timely replies.
Attached, please find the diversion volumes information requested in your letter. You
will see that overall annual water use since 2004 has been reduced by 11.4%. Water use
in the months of April through October has been reduced gince.2004 by 13%. Diversion
volume during the months April through October has also been reduced, for some 25%
between 2004 and 2007, and 16% between 2004 and 2008 use.
Reduced use over the last few years is a result of the City's commitment to institute
conservation measures in both the irrigation and domestic use of water in our community.
Attached please find the City of Ukiah's Water Conservation Program which outlines
current activities the City is talring to address water conservation.
With regard to immediate drought related conditions, here are some technical and rate
related factors that the City of Ukiah must deal with as the summer and high irrigation
use time approaches:
The City's water supply is obtained from a Ranney collector well and Wells 43
and A. The Ranney and Well #3 draw water from an alluvial zone along the
Russian River. The pumping capacity of both the Ranney collector and Well #3
are affected by the amount of flow in the river. If that water is not available
during this summer, the only source of water available as of this date will be Well
#4, which is percolated groundwater.
On February 27, 2009 Governor Arnold Schwarzenegger declared a water
shortage. On February 26, 2009, the City received a letter from Victoria A.
300 SEMINARY AVENUE UKIAH, CA 95482-5400
Phone 707/463-8200 Fee 7071463-6204 Web Address: www.oilyofukiah.com
City staff is actively seeking stimulus funding for a system to deliver recycled
water from the City's wastewater treatment plant. At the current time, it is
anticipated that the wastewater treatment plant could begin to produce recycled
water by August of 2009. A distribution system is under design and plans will be
developed within the next few months. Funding for this important resource
delivery project will be explored from all possible resources, as the City fully
recognizes the value of using recycled water to lower the demand for surface
water in our area. Although a recycled water distribution system cannot be in
place for this summer, the City will pursue developing this resource.
With regard to efforts to identify and prevent water waste and unreasonable use: Typical
water waster penalties include, in the order implemented:
1. Educational letter or visit
2. Educational visit and warning
3. Citation
4. Installation of flow restrietor and possible fine
5. Shutoff and reconnection fee
The City will identify water wasters through monitoring the water meters and citizen
reports.
In closing, please review all aspects of the attached conservation measures and water use
detail in addressing the four questions of your letter, in addition to the specific issues
addressed in the above bullet points.
Please call me at 707- 463- 6213 if you have questions regarding this information.
Sincerely,
?an;e A. Chambers
Manager
Attachments: 1. City of Ukiah Water Use
2. City of Ukiah Water Conservation Program 2009
City of Ukiah Water Use
Annual Water Use
MG
2008
1192.968
-11.4% 2008/2004
2007
1219.964
-9.3% 2007/2004
2006
1248.424
-7.2% 2006/2004
2005
1223.542
-9.1% 2005/2004
2004
1345,744
Water Use (MG)
2004
2007 2008
2009 2007/2004
2008/2004
April
96.743
87.507 87.865
-10%
-9%
May
145.402
121.505 132.345
-16%
-9%
June
162.897
149.782 143.469
-8%
-12%
July
185.876
164.473 158.899
-12%
-15%
August
179.326
162.859 157.056
-9%
-12%
Sept.
156.798
134.481 130.508
-14%
-17%
Oct.
.109.224
83.777 91.724
-2391;
-169a
Total
MG
1036.266
904.385 901.866
ac-ft
3180
2775 2768
Diversion Volume (MG)
2004
2007 2008
2009 2007/2004
2008/2004
April
57.046
27.598 62.754
-52%
10%
May
112.803
72.833 111.365
-35%
-1%
June
129.493
109.976 102.115
-15%
-21%
July
131.935
105.631 109.09
-20%
-17%
August
126,768
104.658 101.593
-17%
-20%
Sept.
117.755
88.134 85.313
-25%
-28%
Oct.
96.734
72.864 73,465
-25%
-24%
Total
MG
772.534
581.694 645.695
-25%
-16%
ac-ft
2371
1785 1982
The City of Ukiah
Water Conservation Program
2009
The unpredictability of its water supplies and ever increasing demand on California's complex
water resources have resulted in a coordinated effort by the California Department of Water
Resources (DWR), water utilities, environmental organizations, and other interested groups to
develop a list of urban water conservation demand management measures (DMM) for
conserving water. This consensus building effort resulted in a Memorandum of Understanding
(MOU) Regarding Urban Water Conservation in California, as amended September 16, 1999,
among parties, which formalizes an agreement to Implement these DMMs and makes a
cooperative effort to reduce the consumption of California's water resources. The MOU is
administered by the California Urban Water Conservation Council (CUWCC). The DMMs as
defined In the MOU are generally recognized as standard definitions of water conservation
measures.
1. CUWCC Demand Management Measures Implemented
The existing conservation The City of Ukiah has had a water conservation program in place
since the late i970's. During the past five years, the City has expanded its program and public
outreach. The City reduced the amount of water it used by over 9.3% in 2007 and 11.40/0 in
2008 compared to 2004.
Currently, the City's conservation program includes the following DMMs:
DMM f. Water survey programs for single-family residential and multi-family residential
connections.
The City testy customer meters upon request and instructs customers in how to use their writer
meter to determine if there is a leak on the demand side of the meter. The City provides toilet
leak detection tablets to customers.
DMM 3. System water audits, leak detection, and repair.
The City performs leak detection and repair on an ongoing basis. The City, also, calculates
system water losses annually and reports this information to DWR.
DMM 4. Metering with commodity rates for all new connections and retrofit of existing
connections.
The City water distribution system Is fully metered. The City is currently replacing old meters in
the system. The new meters will provide a more accurate reading of water use within the City.
The City recently went through a rate re-structuring that is believed will reduce water uses in the
future.
DMM 5. Large landscape conservation programs and Incentives.
The City's Planning Department reviews all landscape plans proposed for new developments
Included in the City's Municipal Code is a requirement for all landscape planting to be "those
which grow well in Ukiah's climate without extensive irrigation." City staff reviews the water use
of its top 5 water users and holds meetings with them on a regblar basis to discuss landscape
conservation programs.
DMM 7. Public information programs.
The City believes public awareness of water conservation issues is an important factor in
ensuring a reliable water supply. The City promotes public awareness of water conservation
through occasional bill stuffers, distribution of the Consumer Confidence Report, radio
broadcasts, newspaper articles, the City of Ukiah's "Activity and Recreation Guide", distribution
of brochures and additional information at local expositions and fairs, and on the City website
advertised to the community on a banner across a City thoroughfare. The City also provides
free of charge water conservation yard signs to encourage minimal use of water for lawn
irrigation.
Water conservation Information and assistance is routinely provided to the public by the water
utility maintenance staff and meter readers while in the field. Field staff receives conservation
training to better assist customers and promote conservation. Door hangers are used to remind
customers of Ukiah's Voluntary Water Conservation Program measures and to provide notice of
problems with outdoor water use.
DMM 8. School education program.
City staff presents information on water conservation tD elementary school children in the
classroom. The City offers local schools tours of Its water treatment plant and also provides
educational materials. Four science classes on public water supply at the high school are
offered once a year.
DMM 9. Conservation programs for commercial, industrial, and institutional accounts
The City has only two industrial customers: Maverick Industries and Red Tail Ale Brewery. The
City surveys the water usage of these industries. Any new commercial, Industrial, or institutional
developments will be reviewed by the City Planning Department and must meet all requirements
of the Municipal Code.
DMM 11. Conservation pricing.
In 2005, the City increased and re-structured its water rates to encourage more conservation.
The City has simplified its rate structure by eliminating rate codes and classifying customers
according to their meter size. The new rate structure Incorporates the American Water Works
Association (AWWA) demand capacity guidelines so that price Increases across meter size in
proportion to the potential demand a customer can place on the water system.
DMM 12. Conservation Coordinator.
The City's Conservation Coordinator Is essential to sustaining and improving Ukiah's ongoing
water conservation program. The conservation coordinator is responsible for implementing and
monitoring the City's water conservation activities. In practice, the City's water conservation
program includes the efforts of the Conservation Coordinator and all staff.
DMM 13. Water waste prohibition.
The City has adopted regulations that state in park: "Where negligent or wasteful use of water
exists on a customer's premises... the City may discontinue the service..." (City Municipal Code
Article 7, Section 3571). The City first sends customers a letter calling their attention to the
wasteful practice and asking for correction. If the condition is not corrected within five days after
the written notice, service may be discontinued if necessary.
DMM 14. Residential UL.FT replacement programs.
Since October 1992, the sale of toilets using more than 1.6 gallons per flush has been
prohibited by State and Federal regulations. These regulations are enforced in the City.
11. Additional Water Conservation Measures
In addition to the DMMs, the City has also taken the following actions,
t. Installation of five waterless urinals in the Ukiah Civic Center to support and promote the
use of waterless urinals in all City facilities and in the public sector. The use of these
urinals has received very positive feedback from Facilities staff who would like to install
these in the Ukiah Valley Conference Center.
2. Cooperative water conservation programs have been developed between the City and
the Mendocino County Water Agency, the Russian River Public Water Agencies, and the
Sonoma County Water Agency.
3. The Ukiah City Council adopted the Ahwahnee Water Principles on April 4, 2007. The
Principles contain ideas for protecting and enhancing water quality, improving water
availability, making more efficient use of water, and conserving water as a scarce
resource. The Principles suggest a process for improving decision-making as it impacts
water-related issues. The City Council reviewed the Principles and determined the ideas
and suggestions promote the Council's stated goals.
111. Future Water Conservation Activities
The City has recently undertaken a rate and revenue study of its water utility. A tiered inclining
block rate structure and excess use charge are being evaluated to-encourage water
conservation.
The City has submitted a pre-applicatlon to the State Water Resources Control Board State
Revolving Fund to construct a recycled water system. The City's Wastewater Treatment Plant
Improvement Project is scheduled to be completed by June 2009. After the project is
completed, the plant will be capable of producing 2 million gallons per day (MGD) in the summer
and up to 7.5 MGD In the winter of Title 22 unrestricted use recycled water.
Other immediate and long-term conservation measures include:
® Installation of waterless urinals and dual flush toilets in all City buildings (immediate)
Sign the California Urban Water Conservation Council's Memorandum of Understanding
Regarding Urban Water Conservation and implement the 14 best management practices
(long term)
• Water efficiency standards for new single-family development (long term)
Water efficient landscaping (long term)
• Water waste ordinance prohibiting: (immediate)
i. gutter flooding
2. carwash fundraisers
3. non-recycling decorative water fountains
4. breaks or leaks in the water delivery system
Incentives for Retrofits (long term)
1. low flow shower heads
2. toilet displacement devices
3, toilet flappers
4. faucet aerators
5. high efficiency washing machines
s. ultra-low flow toilets
7p
June 2, 2010
SUBJECT: STATUS REPORT O RIVERSIDE PARK DEVELOPMENT PROJECT FUNDED BY
CALIFORNIA RESOURCES AGENCY RIVER PARKWAYS GRANT
Summary: The City of Ukiah Community Services Department is managing a Riverside Park
Development Project funded by the California Resources Agency River Parkways Grant program. At the
City Council meeting on April 21, 2010, staff, provided Council with a status report on the project which
summarized work to date. At that meeting, staff provided Council with information on a prequalification
process. This Agenda Summary Report is follow-up on the park development progress and continued
analysis on a potential prequalification process.
Background: In June of 2008, the California Resources Agency announced their River Parkways Grant
Program Awards to 31 cities in the state of California with the City of Ukiah receiving an award for
$810,000 for Riverside Park. Riverside Park is located at the east end of Gobbi Street. The grant project
area or "Phase 1" includes improvements to the entry area, construction of the main trail, one river
access trail and one loop trail. The improvements will meet the River Parkways criteria for restoration of
the riparian habitat by removing invasive vegetation and replanting native species. Phase 1 will include
approximately 2,500 linear feet of trail and 1,200 linear feet of river bank riparian restoration.
Discussion: To date, the City has received 90% design documents from RRM Design Group. Those
plans and specifications have been reviewed by a number of staff such as the City Engineer and the
Parks Golf Superintendant. Staff has also examined the plans with the Paths, Open Space, and, Creeks
Commission as well as the Park, Recreation and Golf Commission.
Due to certain existing site conditions together with very specific timing issues related to work within the
river bank and revegetation, staff together with RRM has determined it would be best to implement the
project in two steps under two separate construction contracts. The first step will be a short contract to
remove debris in the area around the existing service road on the upper bank and establish rough grade
in this area. We are calling this the "Rough Grading Project'. The Rough Grading Project will be
conducted by a competitive bid process with no prequalification element. This work should occur this
Recommended Action(s): Receive status report.
Alternative Council Option(s): N/A
Citizens advised: Paths, Opens Space, Creeks Commission, Park, Recreation and Golf Commission
Requested by: N/A
Prepared by: Katie Merz, Community Services Supervisor
Coordinated with: Mary Horger, Purchasing Supervisor, Jane Chambers, City Manager
Attachments: 1. Prequalification Process Sample From City of Newman
2. Prequalification State Legislation
3. Public Contract Code Section 20100-20103.6
Approved: eza~
e Chambers, City Manager
I
summer (2010) and will allow the site to be fully ready for the second step, invasive plant eradication and
revegetation, which needs to begin next spring (2011) when conditions are best for that work. This
together with trail construction will be the second construction contract which we are calling the "Trail
and Revegetation Project".
Staff is currently working with the Purchasing Supervisor in the preparation of the bid documents and the
contract for the Rough Grading Project. Following completion of the Rough Grading Project the topographic
survey will be updated and the construction documents and bid documents for the Trail and Revegetation
Project will be finalized. We anticipate this second project to go out to bid in late summer (2010).
Because the Trail and Revegetation Project requires certain specialty construction processes staff is
investigating a prequalification process to assist in the selection of the lowest responsible bidder. These
specialties relate primarily to the revegetation process and construction within the main channel of the river.
With regard to revegetation, the grant funding contract specifies that the project must have 80% success
rate in the revegetation. Therefore the success rate of the invasive plant removal as well as the new plant
growth is a very significant concern. Likewise, construction within the main channel of the river will be
subject to close regulatory scrutiny. Staff feels that for this project to be successful it is important that the
contractor has specific experience in this type of work. The pre-qualification process will establish the
criteria for evaluating experience of prospective bidders and provide prospective bidders an opportunity to
demonstrate they meet the criteria. Prospective bidders who are prequalified in this manner will be eligible
to bid on the project.
Staff has included a series of attachments which provide an example of the prequalification process and
also explain the state legislation. Generally the process includes a questionnaire that has addresses the
prospective bidders' basic financial stability, addresses the prospective bidders' company history and past
performance, and addresses project specific experience. Staff will score the questionnaires from each
prospective bidder using a uniform scoring system. The uniform scoring system is also adopted as part o
the prequalification process. A prospective bidder must meet certain minimum scores within each section
to be prequalified to bid on the project. The proposed questionnaire is based substantially on a model form
created by the State Department of Industrial Relations pursuant to Section 20101 of the Public Contract
Code.
The research and analysis of the prequalification process as it applies to Riverside Park is still in progress.
At the Council meeting on April 21, 2010, a number of questions were raised including how the North Coast
Builders Exchange could comment on this process. Staff is continuing to collect that information.
Additionally, staff is working to research similar projects and questionaires that would be applicable to the
Trail and Revegetation Project. Staff is asking both the Paths Open Space and Creeks Commission and
the Park, Recreation and Golf Commission to examine the prequalification process. Staff will return to
Council at a future meeting with further information.
Fiscal Impact:
H Budgeted FY 09/10 F-] New Appropriation ® Not Applicable Budget Amendment Required
Affachment # I
RESOLUTION NO. 2010-
ESTABLISHING A PREQUALIFICATION PROCEDURE AND APPEALS PROCEDURE FOR USE IN
THE BIDDING PROCESS FOR CONSTRUCTION OF THE NEWMAN DOWNTOWN PLAZA
PROJECT
WHEREAS, the City of Newman will be advertising for bids for construction of the Newman
Downtown Plaza (Plaza) project; and
WHEREAS, the City Council of the City of Newman recognizes that the Plaza is a highly visible
aesthetic improvement to the core of Downtown Newman requiring substantial investment of public
funds; and
WHEREAS, the City Council of the City of Newman has determined that it is in the public
interest for the City to adopt a procedure that will help ensure the Plaza is constructed by a reputable and
qualified contractor at the best possible price; and
WHEREAS, the Public Contracts Code (PCC) §20101 permits cities to prequalify contractors
who wish to bid on public works contracts; and
WHEREAS, the City staff has developed a uniform system of rating bidders based on objective
criteria in accordance with PCC§20101; and
WHEREAS, the City staff has also developed a process through which decisions regarding a
prospective bidders qualifications may be appealed in accordance with PCC§20101; and
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Newman hereby
resolve to require prospective bidders on the Plaza project to be prequalified in accordance with PCC
§20101, and in so resolving the City Council of the City of Newman adopts the following forms and
procedures for use as the'basis for prequalifying prospective bidders:
A. Prequalification Questionnaire, "Exhibit A";
B. Project Experience Interview Questions and Procedures, "Exhibit B";
C. Uniform Rating System and Procedures, "Exhibit C";
D. Prequalification and Appeal Procedures, "Exhibit D"
The foregoing resolution was introduced at a regular meeting of the City Council of the City of
Newman held on the 9`b day of March 2010 by Council Member , who moved its adoption which
motion was duly seconded and was upon roll call carried and the resolution adopted by the following
vote:
AYES:
NOES:
ABSENT:
APPROVED:
Mayor of the City of Newman
ATTEST:
Deputy City Clerk of the City of Newman
EXHIBIT A
BIDDER PREQUALIFICATION QUESTIONNAIRE
FOR
THE NEWMAN DOWNTOWN PLAZA PROJECT
CONTACT INFORMATION
Firm Name:
(as it appears on license)
Check One: ❑ Corporation
❑ Partnership
❑ Sole Prop.
Contact Person:
Address:
Phone:
If firm is a sole proprietor or partnership:
Owner(s) of Company
Fax:
Contractor's License Number(s) and states in which they are held:
Newman Downtown Plaza BIDDER PREQUALIFICATION QUESTIONNAIRE
RRM Project #1306540 Page 1
PART I. ESSENTIAL REQUIREMENTS FOR QUALIFICATION
Contractor will be immediately disqualified if the answer to any of questions 1 through 5 is "no."'
Contractor will be immediately disqualified if the answer to any of questions 6, 7, 8 or 9 is "yes."Z If the
answer to question 8 is "yes," and if debarment would be the sole reason for denial of pre-qualification,
any pre-qualification issued will exclude the debarment period.
1. Contractor is qualified to obtain upon award of the contract a California Contractor's license of the class
stated in the Notice to Bidders.
❑ Yes ❑ No
2. Contractor has a liability insurance policy with a policy limit of at least $2,000,000 per occurrence and
$4,000,000 aggregate.
❑ Yes ❑ No
3. Contractor has current workers' compensation insurance policy as required by the Labor Code or is legally
self-insured pursuant to Labor Code section 3700 et. seq.
❑ Yes ❑ No ❑ Contractor is exempt from this requirement, because it has no employees
4. Have you attached your latest copy of a reviewed or audited financial statement with accompanying notes
and supplemental information?"
❑ Yes ❑ No
NOTE: A financial statement that is not either reviewed or audited is not acceptable. A letter verifying
availability of a line of credit may also be attached; however, it will be considered as supplemental
information only, and is not a substitute for the required financial statement.
5. Have you attached a notarized statement from an admitted surety insurer (approved by the California
Department of Insurance) and authorized to issue bonds in the State of California, which states: (a) that your
current bonding capacity is sufficient for the project for which you seek pre-qualification if you are seeking
pre-qualification for a single project; or (if you are seeking pre-qualification valid for a year) (b) your current
available bonding capacity?4
❑ Yes ❑ No
NOTE: Notarized statement must be from the surety company, not an agent or broker.
6. Has your contractor's license been revoked at any time in the last five years?
❑ Yes ❑ No
i A "no" answer to Question 4 will not be disqualifying if the contractor is exempt-from complying with
Question 4, for reasons explained in footnote 3.
2 A contractor disqualified solely because of a "Yes" answer given to question 6, 7, or 9 may appeal the
disqualification and provide an explanation of the relevant circumstances during the appeal procedure.
3 Public Contract Code section 20101(e) exempts from this requirement a contractor who has qualified as
a small business pursuant to Government Code section 14837(d)(1), if the bid is "no more than 25 per cent of the
qualifying amount provided in section 14837(d)(1)." As of January 1, 2001, the qualifying amount is $10 million,
and 25 per cent of that amount, therefore, is $2.5 million.
4 An additional notarized statement from the surety may be requested by City of Newman at the time of
submission of a bid, if this pre-qualification package is submitted more than 60 days prior to submission of the bid.
Newman Downtown Plaza BIDDER PREQUALIFICATION QUESTIONNAIRE
RRM Project #1306540 Page 2
Has a surety firm completed a contract on your behalf, or paid for completion because your firm was default
terminated by the project owner within the last five (5) years?
❑ Yes ❑ No
8. At the time of submitting this pre-qualification form, is your firm ineligible to bid on or be awarded a public
works contract, or perform as a subcontractor on a public works contract, pursuant to either Labor Code
section 1777.1 or Labor Code section 1777.7?
❑ Yes ❑ No
If the answer is "Yes," state the beginning and ending dates of the period of debarment:
9. At any time during the last five years, has your firm, or any of its owners or officers been convicted of a crime
involving the awarding of a contract of a government construction project, or the bidding or performance of a
government contract?
❑ Yes ❑ No
Newman Downtown Plaza BIDDER PREQUALIFICATION QUESTIONNAIRE
RRM Project #1306540 Page 3
PART 11. ORGANIZATION, HISTORY, ORGANIZATIONAL PERFORMANCE, COMPLIANCE WITH CIVIL AND
CRIMINAL LAWS
A. Current Organization and Structure of the Business
For Firms That Are Corporations:
1a. Date incorporated
1b. Under the laws of what state:
1c. Provide all the following information for each person who is either (a) an officer of the corporation (president,
vice president, secretary, treasurer), or (b) the owner of at least ten per cent of the corporation's stocK.
Name Position Years with Co: % Ownership Social Security #
1d. Identify every construction firm that any person listed above has been associated with (as owner, general
partner, limited partner or officer) at any time during the last five years.
NOTE: For this question, "owner" and "partner" refer to ownership of ten per cent or more of the business,
or 10 per cent or more of its stocK, it the ousmess is a corporation.
Dates of Person's Participation with
Person's Name Construction Firm Firm
For Firms That Are Partnerships:
1a. Date of formation.
1b. Under the laws of what state:
1c. Provide all the following information for each partner who owns 10 per cent or more of the firm.
Name Position Years with Co. % Ownership Social Security #
1d. Identify every construction company that any partner has been associated with (as owner, general partner,
limited partner or officer) at any time during the last five years.
NOTE: For this question, "owner" and "partner" refer to ownership of ten per cent or more of the business,
..a -4:;+. e+-D if +ha hueinacc ie n rnrnnratinn-
Person's Name
Construction Company
Dates of Person's Participation with
Company
Newman Downtown Plaza BIDDER PREQUALIFICATION QUESTIONNAIRE
RRM Project #1306540 Page 4
For Firms That Are Sole Proprietorships:
1a. Date of commencement of business.
1b. Social security number of company owner.
1c. Identify every construction firm that the business owner has been associated with (as owner, general partner,
limited partner or officer) at any time during the last five years.
NOTE: For this question, "owner" and "partner" refer to ownership of ten per cent or more of the business,
or ten per cent or more of its stock, if the business is a corporation.
Dates of Person's Participation with
Person's Name Construction Company Company
For Firms That Intend to Make a Bid as Part of a Joint Venture:
1a. Date of commencement of joint venture.
1b. Provide all of the following information for each firm that is a member of the joint venture that expects to bid
on one or more projects:
Name of firm % Ownership of Joint Venture
B. History of the Business and Organizational Performance
2. Has there been any change in ownership of the firm at any time during the last three years?
NOTE: A corporation whose shares are publicly traded is not required to answer this question.
❑ Yes ❑ No
If "yes, " explain on a separate signed page.
3. Is the firm a subsidiary, parent, holding company or affiliate of another construction firm?
NOTE: Include information about other firms if one firm owns 50 per cent or more of another, or if an
owner, partner, or officer of your firm holds a similar position in another firm.
❑ Yes ❑ No
If "yes," explain on a separate signed page.
4. Are any corporate officers, partners or owners connected to any other construction firms.
NOTE: Include information about other firms if an owner, partner, or officer of your firm holds a similar
position in another firm.
❑ Yes ❑ No
If "yes," explain on a separate signed page.
Newman Downtown Plaza BIDDER PREQUALIFICATION QUESTIONNAIRE
RRM Project #1306540 Page 5
5. State your firm's gross revenues for each of the last three years:
6. How many years has your organization been in business as a contractor under your present business name
and license number? years
7. Is your firm currently the debtor in a bankruptcy case?
Yes ❑ No
If "yes," please attach a copy of the bankruptcy petition, showing the case number, and the date on which the
petition was filed.
8. Was your firm in bankruptcy at any time during the last five years? (This question refers only to a bankruptcy
action that was not described in answer to question 7, above)
❑ Yes ❑ No
If "yes," please attach a copy of the bankruptcy petition, showing the case number and the date on which
the petition was filed, and a copy of the Bankruptcy Court's discharge order, or of any other document
that ended the case, if no discharge order was issued.
Licenses
9. List all construction license numbers, classifications and expiration dates of the contractor licenses held by
your firm indicating state in which license is held and contact information for the licensing board of states
other than California (list on separate signed sheet if necessary):
10. If any of your firm's license(s) are held in the name of a corporation or partnership, list below the names of
the qualifying individual(s) listed inthe applicable state licensing board or agency records who meet(s) the
experience and examination requirements for each license.
11. Has your firm changed names or license number in the past five years?
❑ Yes ❑ No
If "yes," explain on a separate signed page, including the reason for the change.
12. Has any owner, partner or (for corporations:) officer of your firm operated a construction firm under any
other name in the last five years?
❑ Yes ❑ No
If "yes," explain on a separate signed page, including the reason for the change.
13. Has any contractor's license held by your firm or its Responsible Managing Employee (RME) or Responsible
Managing Officer (RMO) been suspended within the last five years?
❑ Yes ❑ No
If "yes," please explain on a separate signed sheet.
Newman Downtown Plaza BIDDER PREQUALIFICATION QUESTIONNAIRE
RRM Project #1306540 Page 6
Disputes
14. At any time in the last five years has your firm been assessed and paid liquidated damages after completion of
a project under a construction contract with either a public or private owner?
❑ Yes ❑ No
If yes, explain on a separate signed page, identifying all such,projects by owner, owner's address, the date of
completion of the project, the contract price, the amount of liquidated damages assessed, and all other
information necessary to fully explain the assessment of liquidated damages.
15. In the last five years has your firm, or any firm with which any of your company's owners, officers or partners
was associated, been debarred, disqualified, removed or otherwise prevented from bidding on, or
completing, any government agency or public works project for any reason?
NOTE: "Associated with" refers to another construction firm in which an owner, partner or officer of your
firm held a similar position, and which is listed in response to question 1c or 1d on this form.
❑ Yes ❑ No
If "yes," explain on a separate signed page. State whether the firm involved was the firm applying for pre-
qualification here or another firm. Identify by name of the company, the name of the person within your firm
who was associated with that company, the year of the event, the owner of the project, the project and the
basis for the action.
16. In the last five years has your firm been denied an award of a public works contract based on a finding by a
public agency that your company was not a responsible bidder?
❑ Yes ❑ No
If "yes," explain on a separate signed page. Identify the year of the event, the owner, the project and the
basis for the finding by the public agency.
NOTE: The following two questions refer only to disputes between your firm and the owner of a project.
You need not include information about disputes between your firm and a supplier, another contractor, or
subcontractor. You need not include information about "pass-through disputes in which the actual
dispute is between a sub-contractor and a project owner. Also, you may omit reference to all disputes
about amounts of less than $50,000.
17. In the past five years has any claim again st your firm concerning your firm's work on a construction project
been filed in court or arbitration?
❑ Yes ❑ No
If "yes," on separate signed-sheets of paper identify the claim(s) by providing the project name, date of
the claim, name of the claimant, a brief description of the nature of the claim, the court in which the case
was filed and a brief description of the status of the claim (pending or, if resolved, a brief description of
the resolution).
18. In the past five years has your firm made any claim against a project owner concerning work on a project or
payment for a contract and filed that claim in court or arbitration?
Yes ❑ No
if "yes," on separate signed sheets of paper identify the claim by providing the project name, date of the
claim, name of the entity (or entities) against whom the claim was filed, a brief description of the nature
of the claim, the court in which the case was filed and a brief description of the status of the claim
(pending, or if resolved, a brief description of the resolution).
Newman Downtown Plaza BIDDER PREQUALIFICATION QUESTIONNAIRE
RRM Project #1306540 Page 7
19. At any time during the past five years, has any surety company made any payments on your firm's behalf as a
result of a default, to satisfy any claims made against a performance or payment bond issued on your firm's
behalf, in connection with a construction project, either public or private?
❑ Yes ❑ No
if "yes," explain on a separate signed page the amount of each such claim, the name and telephone
number of the claimant, the date of the claim, the grounds for the claim, the present status of the claim,
the date of resolution of such claim if resolved, the method by which such was resolved if resolved, the
nature of the resolution and the amount, if any, at which the claim was resolved.
20. In the last five years has any insurance carrier, for any form of insurance, refused to renew the insurance
policy for your firm?
❑ Yes ❑ No
If "yes," explain on a separate signed page. Name the insurance carrier,
the form of insurance and the year of the refusal.
Criminal Matters and Related Civil Suits
21. Has your firm or any of its owners, officers or partners ever been found liable in a civil suit or found guilty in a
criminal action for making any false claim or material misrepresentation to any public agency or entity?
❑ Yes ❑ No
If "yes," explain on a separate signed page, including identifying who was involved, the name of the public
agency, the date of the investigation and the grounds for the finding.
22. Has your firm or any of its owners, officers or partners ever been convicted of a crime involving any federal,
state, or local law related to construction?
❑ Yes ❑ No
If "yes," explain on a separate signed page, including identifying who was involved, the name of the public
agency, the date of the conviction and the grounds for the conviction.
23. Has your firm or any of its owners, officers or partners ever been convicted of a federal or state crime of
fraud, theft, or any other act of dishonesty?
❑ Yes ❑ No
If "yes," identify on a separate signed page the person or persons convicted, the court (the county if a state
court, the district or location of the federal court), the year and the criminal conduct.
Bonding
24. Bonding capacity: Provide documentation from your surety identifying the following:
Name of bonding company/surety:
Name of surety agent, address and telephone number:
Newman Downtown Plaza BIDDER PREQUALIFICATION QUESTIONNAIRE
RRM Project #1306540 Page 8
25. If your firm was required to pay a premium of more than one per cent for a performance and payment bond
on any project(s) on which your firm worked at any time during the last three years, state the percentage that
your firm was required to pay. You may provide an explanation for a percentage rate higher than one per
cent, if you wish to do so.
26. List all other sureties (name and full address) that have written bonds for your firm during the last five years,
including the dates during which each wrote the bonds:
27. During the last five years, has your firm ever been denied bond coverage by a surety company, or has there
ever been a period of time when your firm had no surety bond in place during a public construction project
when one was required?
❑ Yes ❑ No
If yes, provide details on a separate signed sheet indicating the date when your firm was denied coverage
and the name of the company or companies which denied coverage; and the period during which you had
no surety bond in place.
C. Compliance with Occupational Safety and Health Laws and with Other Labor Legislation Safety
28. Has CAL OSHA or other comparable agency of another state cited and assessed penalties against your firm for
any "serious," "willful" or "repeat" violations of its safety or health regulations in the past five years?
NOTE: If you have filed an appeal of a citation, and the Occupational Safety and Health Appeals Board has
not yet ruled on your appeal, you need not include information about it.
❑ Yes ❑ No
If "yes," attached a separate signed page describing the citations, including information about the dates of
the citations, the nature of the violation, the project on which the citation(s) was or were issued, the
amount of penalty paid, if any. If the citation was appealed to the Occupational Safety and Health Appeals
Board and a decision has been issued, state the case number and the date of the decision.
29. Has the federal Occupational Safety and Health Administration cited and assessed penalties against your firm
in the past five years?
NOTE: If you have filed an appeal of a citation and the Appeals Board has not yet ruled on your appeal,
or if there is a court appeal pending, you need not include information about the citation.
❑ Yes ❑ No
If "yes," attach a separate signed page describing each citation.
Newman Downtown Plaza
RRM Project #1306540
BIDDER PREQUALIFICATION QUESTIONNAIRE
Page 9
30. Has the EPA or any Air Quality Management District or any Regional Water Quality Control Board cited and
assessed penalties against either your firm or the owner of a project on which your firm was the contractor, in
the past five years?
NOTE: If you have filed an appeal of a citation and the Appeals Board has not yet ruled on your appeal,
or if there is a court appeal pending, you need not include information about the citation.
Yes ❑ No
if "yes," attach a separate signed page describing each citation.
31. How often do you require documented safety meetings to be held for construction employees and field
supervisors during the course of a project?
32. List your firm's Experience Modification Rate (EMR) (California workers'
compensation insurance) for each of the past three premium years:
NOTE: An Experience Modification Rate is issued to your firm annually by your workers' compensation
insurance carrier.
Current year:.
Previous year:
Year prior to previous year:
If your EMR for any of these three years is or was 1.00 or higher you may, if you wish, attach a letter of
explanation.
33. Within the last five years has there ever been a period when your firm had employees but was without
workers' compensation insurance or state-approved self-insurance?
❑ Yes ❑ No
If "yes," please explain the reason for the absence of workers' compensation insurance on a separate signed
page. If "No," please provide a statement by your current workers' compensation insurance carrier that
verifies periods of workers' compensation insurance coverage for the last five years. (If your firm has been in
the construction business for less than five years, provide a statement by your workers' compensation
insurance carrier verifying continuous workers' compensation insurance coverage for the period that your
firm has been in the construction business.)
Prevailing Wage and Apprenticeship Compliance Record
34. Has there been more than one occasion during the last five years in which your firm was required to pay
either back wages or penalties for your own firm's failure to comply with the state's prevailing wage laws?
NOTE: This question refers only to your own firm's violation of prevailing wage laws, not to violations of
the prevailing wage laws by a subcontractor.
❑ Yes ❑ No
if "yes," attach a separate signed page or pages, describing the nature of each violation, identifying the name
of the project, the date of its completion, the public agency for which it was constructed; the number of
employees who were initially underpaid and the amount of back wages and penalties that you were required
to pay.
Newman Downtown Plaza BIDDER PREQUALIFICATION QUESTIONNAIRE
RRM Project #1306540 Page 10
35. During the last five years, has there been more than one occasion in which your own firm has been penalized
or required to pay back wages for failure to comply with the federal Davis-Bacon prevailing wage
requirements?
❑ Yes ❑ No
if "yes," attach a separate signed page or pages describing the nature of the violation, identifying the
name of the project, the date of its completion, the public agency forwhich it was constructed; the
number of employees who were initially underpaid, the amount of back wages you were required to pay
along with the amount of any penalty paid.
36. Provide the name, address and telephone number of the apprenticeship program (approved by the California
Apprenticeship Council) from whom you intend to request the dispatch of apprentices to your company for
use on any public work project for which you are awarded a contract by [Public Entity].
37. If your firm operates its own State-approved apprenticeship program:
(a) Identify the craft or crafts in which your firm provided apprenticeship training in the past year.
(b) State the year in which each such apprenticeship program was approved, and attach evidence of
the most recent California Apprenticeship Council approval(s) of your apprenticeship program(s).
(c) State the number of individuals who were employed by your firm as apprentices at any time
during the past three years in each apprenticeship and the number of persons who, during the
past three years, completed apprenticeships in each craft while employed by your firm.
38. At any time during the last five years, has your firm been found to have violated any provision of California
apprenticeship laws or regulations, or the laws pertaining to use of apprentices on public works?
NOTE: You may omit reference to any incident that occurred prior to January 1, 1998, if the violation
was by a subcontractor and your firm, as general contractor on a project, had no knowledge of the
subcontractor's violation at the time they occurred.
Yes ❑ No
If "yes," provide the date(s) of such findings, and attach copies of the Department's final decision(s).
Newman Downtown Plaza BIDDER PREQUALIFICATION QUESTIONNAIRE
RRM Project #1306540 Page 11
PART III: RECENT COMPARABLE CONSTRUCTION PROJECTS COMPLETED
39. Contractor shall provide information on 3 public projects completed within the last 5 years that are
comparable in scope and context as the Newman Downtown Plaza. Each comparable project should be
primarily pedestrian-oriented site improvements that closely match or exceed the following attributes. It is
not mandatory that each project have all of the attributes to any extent or to the extent indicated; however
more points are given to projects that meet or exceed the stated amounts:
a. Construction contract price of over $2.0 million;
b. Roadway construction within Caltrans ROW equaling at 15% of the construction contract price;
c. Refined colored concrete pedestrian-oriented paving equaling approximately 15% of the
construction contract price;
d. Brick paving, mortared and sand set, equaling at least 5% of the construction contract price;
e. Brick masonry walls and columns equaling at least 5% of the construction contract price;
f. Architectural steel/ornamental metal structures equaling at least 10% of the construction contract
price;
Names and contact information of references for each comparable project must be current and verifiable.
Failure to list the above referenced number of comparable projects or determination of the City that the
information is invalid will result in immediate disqualification.
For all listed projects, the prospective bidder must have acted in the role of general contractor.
Provide information about each comparable project on the following Project Data Form.
Newman Downtown Plaza BIDDER PREQUALIFICATION QUESTIONNAIRE
RRM Project #1306540 Page 12
PROJECT DATA SHEET
(One Form per Project)
1. Project Name:
2. Project Location
3. Project Type:
4. Contract Price:
a. Explain Difference:
(use additional signed
sheets as necessary)
5. Project Schedule:
a. Explain Difference:
(use additional signed
sheets as necessary)
Public: F-1
Price at Bid
Private: ❑
Price at Completion:
Schedule at Start:
(in working days)
Actual Schedule:
(in working days)
6. Project Location:
7. Owner Information
Name:
Address:
Phone Number.
Contact Person:
8. Architect's Information:
Firm Name:
Phone Number:
Contact Person:
Newman Downtown Plaza BIDDER PREQUALIFICATION QUESTIONNAIRE
RRM Project #1306540 Page 13
9. Construction Manager:
Company Name:
Phone Number:
Contact Person:
10. General Contractor's
Project Manager:
11. General Contractor's
Superintendent:
12. Project Attributes:
a. Provide a general description of the comparable project:
b. Amount of Caltrans Roadway construction as percentage of
total contract price:
c. Amount of refined colored concrete pedestrian-oriented paving
as percentage of total contract price
d. Amount of brick paving, mortared and sand set, as percentage
of total contract price:
e. Amount of brick masonry walls and columns as a percentage of
the total contract price
f. Amount of architectural steel/ornamental metal structures as
percentage of total contract price:
Newman Downtown Plaza BIDDER PREQUALIFICATION QUESTIONNAIRE
RRM Project #1306540 Page 14
PRE-QUALIFICATION DECLARATION
(Printed Name)
of
(Title) (Name of Firm)
and certify and declare that I have read all the foregoing answers to this prequalification questionnaire and
know their contents. The matters stated in the questionnaire answers and all attachments are true of my
own knowledge and belief, exceptas to those matters stated on information and belief, and as to those
matters I believe them to be true. I declare under penalty of perjury under the laws of the State of California,
that the foregoing is correct and that this declaration was executed in
County/State, on , 2010.
Dated:
Newman Downtown Plaza
RRM Project #1306540
, hereby declare that I am the
(Signature)
BIDDER PREQUALIFICATION QUESTIONNAIRE
Page 15
EXHIBIT B
PROJECT EXPERIENCE INTERVIEW QUESTIONS AND PROCEDURES
NEWMAN DOWNTOWN PLAZA PROJECT
The following questions will be used to interview randomly selected contacts from at least two completed
projects. The City of Newman will conduct the interviews. No action on the contractor's part is necessary.
First, please give a brief description of the project.
1. Are there any outstanding stop notices, liens, or claims by the contractor that are currently unresolved on
contracts for which notices of completion were recorded more than 120 days ago? (1 point for each is
deducted from overall score; maximum amount to be deducted is 5 points)
2. On a scale of 1-10, with 10 being the best, did the contractor provide adequate personnel? (Max. 10 points)
3. On a scale of 1-10, with 10 being the best, did the contractor provide adequate supervision? (Max. 10 points)
4. On a scale of 1-10, with 10 being the best, was there adequate equipment provided on the job? (Max. 10
points)
5. On a scale of 1-10, with 10 being the best, was the contractor timely in providing reports and other
paperwork, including change order paperwork and scheduling updates? (Max. 10 points)
6. On a scale of 1-10, with 10 being the best, did the contractor adhere to the project schedule that your
[agency] [business] approved? (Max. 10 points)
7. Was the project completed on time? (10 points if the answer is "Yes").
Or, if the answer is "no," on a scale of 1-10 with 10 being the best to what extent was the contractor
responsible for the delay in completion?
8. On a scale of 1-10, with 10 being the best, rate the contractor on the timely submission of reasonable cost and
time estimates to perform change order work. (Max. 10 points)
9. On a scale of 1-10, with 10 being the best, rate the contractor on how well the contractor performed the
work after a change order was issued, and how well the contractor integrated the change order work into
the existing work. (Max. 10 points).
10. On a scale of 1-10, with 10 being the best, rate how has the contractor been performing in the area of
turning in Operation & Maintenance manuals, completing as-built drawings, providing required training
and taking care of warranty items? (Max. 10 points)
11. On a scale of 1-10, with 10 being the best, rate the contractor on whether there were an unusually high
number of claims, given the nature of the project, or unusual difficulty in resolving them. (Max. 10 points)
12. On a scale of 1-10, with 10 being the highest, rate the contractor with respect to timely payments by the
contractor to either subcontractors or suppliers. (If the person being interviewed knows of no such
difficulties, the score on this question should be "10.")
13. On a scale of 1-10, with 10 being the best, how would you rate the quality of the work overall? (Max.10
points)
Newman Downtown Plaza PROJECT EXPERIENCE INTERVIEW QUESTIONS AND PROCEDURES
RRM Project #1306540 Page 1
INSTRUCTIONS FOR INTERVIEW QUESTIONS
The following is meant to assist in the interviews of the managers of comparable projects previously completed
(that is, the people who supervised the projects for the project owners) by the contractor wishing to pre-qualify.
The interview questions allow qualitative review of work performance for contractors who choose to bid and pre-
qualify for public works contracts. The interview questions will be used to examine randomly selected contacts
from at least two completed past projects.
In each question, the person being interviewed is asked to rate a certain aspect of contractor's performance, using
a scale of 1 to 10. The highest possible score is 120 points. A score of less than 55 points on any of the comparable
projects disqualifies the contractor from bidding on projects that are proposed by the public agency. A score of 72
points or more on each interview is sufficient for a contractor to qualify"on this portion of the prequalification
process. If the scores resulting from an interview are between 55 and 72, the public agency should conduct
another interview to collect additional information.
It is possible that the score given to any interview answer may be challenged in an appeal. For that reason, be
sure to: (a) ask the person being interviewed for specific information or details, to explain or substantiate the
numerical answer given; and (b) take written notes of the information provided.
Selection of the Interviewer:
(a) The City Manager shall designate an individual who is at least moderately well informed about public works
construction to serve as the interviewer.
(b) The individual shall be unbiased during the interview; this is to ensure accurate implementation of the
interview questions.
(c) The individual shall not use examples or deviate from the questions unless the project manager is unclear and
prompts further explanation. The interviewer shalloffer additional explanation of the questions only if he/she
is sure of the intent of the question in the interview.
Locating the respondent to interview:
(a) The interviewer shall attempt to contact a project manager of a past project for the interview. The interviewer
shall be aware that for one interview to be completed, there may be a need to interview multiple individuals.
That is, the interviewer may have to contact multiple individuals, such as the project manager concerning the
building process, and a financial manager for warranty items, assessed liens, and the like.
(b) Once reached, the interviewer shall review the information contained in the questionnaire of the past project
with the project manager. That is, review who is being interviewed and why (purposes of pre-qualifying for
public works), the past project type, completion date, and other pertinent information to ensure that the
project manager is sure of the project he/she is asked to review.
Interview Length:
(a) The interview should take 8-12 minutes, under normal circumstances.
(b) The interviewer, when contacting the project manager, should convey the expected time which it takes to
conduct the interview. This is to ensure the individual is not discouraged from taking part in the interview
Newman Downtown Plaza PROJECT EXPERIENCE INTERVIEW QUESTIONS AND PROCEDURES
RRM Project #1306540 Page 2
Conducting the interviews:
(a) The interview shall examine at least two separate past projects listed in the questionnaire.
(b) After the interview is scored, the interviewer shall compare the interview score with the same contractor's
score on the written questionnaire. If the ratings (overall scores) are far apart, the interviewer shall conduct at
least one/two more interviews to determine how past performance should be weighted.
(c) While conducting the interview, the interviewer should be consistent with the way the questions are
presented. That is, if the interviewer changes the way questions are presented during the review, it could
potentially change the way the respondent answers the questions and jeopardize the overall scoring.
Newman Downtown Plaza PROJECT EXPERIENCE INTERVIEW QUESTIONS AND PROCEDURES
RRM Project #1306540 Page 3
EXHIBIT C
UNIFORM RATING SYSTEM AND PROCEDURES
FORTH E NEWMAN DOWNTOWN PLAZA PROJECT
The prequalification questionnaires for the Newman Downtown Plaza project will be reviewed and scored by the City
Manager or his designee. Part I of the Questionnaire contains "yes/no" type questions on essential requirements for
qualifications. See the questionnaire for direction on how those questions are handled. The balance of the
questionnaire has a mix of purely informational and scorable questions. The following uniform rating system shall be
used to score the scorable questions in the questionnaire. The scorable questions arise in three different areas of the
questionnaire:
Part II.B. History of the business and organizational performance;
Part II.C. Compliance with occupational safety and health laws, workers' compensation and other
labor legislation: and
Part III Interviews related to quality of performance on completion of recent comparable
rp oiects.
Note: Not all questions in the questionnaire are scorable; some questions simply ask for information about the
contractor firm's structure, officers and history. This document includes only those questions that are
"scorable." The question numbers referenced below correspond to the numbers used in the
questionnaire. Thus, the questions included here begin with question number 6, and there are a few
breaks in the numerical sequence.
Scores Needed for Prequalification
To prequalify, a contractor is required to have acceptable responses in Part I of the questionnaire and have a passing
score within each of the three large categories referred to above.
Passing scores shall be as follows:
Part II.B., "History of the business and organizational performance," a score of 57 out of a maximum 76 points shall be
considered as passing.
Part II.C., Compliance with occupational safety and health laws, workers' compensation and other labor legislation a
score of 38 out of a maximum of 53 points shall be considered passing.
Part III, Completion of recent projects and quality of performance. includes a series of interview questions, and may
also include questions about recently completed (public or private) construction projects. For the interview questions,
DIR recommends that a public agency interview project managers for the owners of two completed projects. DIR
recommends a scoring system that would allowa maximum score of 120 points for each interview. For these
questions, DIR recommends qualification for a contractor whose score on each of two interviews is 72 points or more;
a denial of pre-qualification for a contractor whose score on either interview is less than 55 points; and an additional
interview with another reference if the score resulting from one interview is between 55 points and 72 points.
In addition, for Part III the prospective bidder must score at least 20 points out of the 30 possible points in scoring of
the attributes of at least 2 of the comparable projects.
Newman Downtown Plaza UNIFORM RATING SYSTEM AND PROCEDURES
RRM Project #1306540 Page 1
Scorable Questions from Part II B of Questionnaire: Questions about History of the Business and
Organizational Performance(16 questions)
6. How many years has your organization been in business as a contractor under your present business name
and license number? years
3 years or more = 2 points
4 years = 3 points
5 years = 4 pts.
6 years or more = 5 points
Is your firm currently the debtor ima bankruptcy case?
❑ Yes ❑ No
"No"= 3 points" "Yes"= 0 points
8. Was your firm in bankruptcy any time during the last five years? (This question refers only to a
bankruptcy action that was not described in answer to question 7, above).
❑ Yes ❑ No
"No" = 3 points" "Yes" = 0 points
13. Has any contractor's license.held by your firm or its Responsible Managing Employee (RME) or
Responsible Managing Officer (RMO) been suspended within the last five years?
❑ Yes No
No = 5 points Yes = 0 points
14. At anytime in the last five years, has your firm been assessed and paid liquidated damages after
completion of a project, under a construction contract with either a public or private owner?
❑ Yes ❑ No
No projects with liquidated damages of more than $50,000, or one project with liquidated damages = 5
points.
Two projects with liquidated damages of more than $50,000 = 3 points
Any other answer. no points
15. In the last five years has your firm, or any firm with which any of your company's owners, officers or partners
was associated, been debarred, disqualified, removed or otherwise prevented from bidding on, or
completing, any government agency or public works project for any reason?
NOTE: "Associated with" refers to another construction firm in which an owner, partner or officer of your
firm held a similar position, and which is listed in response to question 1c or 1d on this form.
❑ Yes ❑ No
No = 5 points Yes = 0 points
16. In the last five years, has your firm been denied an award of a public works contract based on a finding by a
public agency that your company was not a responsible bidder?
❑ Yes ❑ No
No = 5 points Yes = 0 points
Newman Downtown Plaza UNIFORM RATING SYSTEM AND PROCEDURES
RRM Project #1306540 Page 2
NOTE: The following two questions refer only to disputes between your firm and the owner of a project.
You need not include information about disputes between your firm and a supplier, another contractor, or
subcontractor. You need not include information about "pass-through" disputes in which the actual
dispute is between a sub-contractor and a project owner. Also, you may omit reference to all disputes
about amounts of less than $50,000.
17. In the past five years, has any claim against your firm concerning your firm's work on a construction project,
been filed in court or arbitration?
❑ Yes ❑ No
if the firm's average gross revenue for the last three years was less than
$50 million, scoring is as follows:
5 points for either "No" or "Yes" indicating 1 such instance.
3 points for "Yes" indicating 2 such instances.
0 points for "Yes" if more than 2 such instances.
if your firm's average gross revenue for the last three years was more than $50 million, scoring is as
follows:
5 points for either "No" or "Yes" indicating 1, 2, or 3 such instances.
3 points for "Yes" indicating either 4 or 5 such instances.
0 points for "Yes" if more than 5 such instances.
18. In the past five years, has your firm made any claim against a project owner concerning work on a project
or payment for a contract, and filed that claim in court or arbitration?
❑ Yes ❑ No
If your firm's average gross revenues for the last three years was less than $50 million scoring is as
follows:
5 points for either "No" or "Yes" indicating 1 such instance.
3 points for "Yes" indicating 2 such instances.
0 points for "Yes" if more than 2 such instances.
If your firm's average gross revenues for the last three years was more than $50 million, scoring is as
follows:
5 points for either "No" or "Yes" indicating 1, 2, or 3 such instances.
3 points for "Yes" indicating either 4 or 5 such instances.
0 points for "Yes" if more than 5 such instances.
19. At any time during the past five years, has any surety company made any payments on your firm's behalf
as a result of a default, to satisfy any claims made against a performance or payment bond issued on your
firm's behalf in connection with a construction project, either public or private?
❑ Yes ❑ No
5 points for either "No" or "Yes" indicating 1 such claim.
3 points for "Yes" indicating no more than 2 such claims
Subtract five points for "Yes" if more than 2 such claims
Newman Downtown Plaza UNIFORM RATING SYSTEM AND PROCEDURES
RRM Project #1306540 Page 3
20. In the last five years, has any insurance carrier, for any form of insurance, refused to renew the insurance
policy for your firm?
❑ Yes ❑ No
5 points for either "No" or "Yes" indicating 1 such instance.
3 points for "Yes" indicating 2 such instances.
0 points for "Yes" or if more than 2 such instances.
21. Has your firm, or any of its owners, officers, or partners ever been found liable in a civil suit, or found
guilty in a criminal action, for making any false claim or material misrepresentation to any public agency
or entity?
❑ Yes ❑ No
No = 5 points Yes = subtract 5 points
22. Has your firm, or any of its owners, officers or partners ever been convicted of a crime involving any
federal, state, or local law related to construction?
❑ Yes ❑ No
No = 5 points Yes = subtract 5 points
23. Has your firm or any of its owners, officers or partners ever been convicted of a federal or state crime of
fraud, theft, or any other act of dishonesty?
❑ Yes ❑ No
No = 5 points Yes = subtmct 5 points
25. If your firm was required to pay a premium of more than one percent for a performance and payment
bond on any project(s) on which your firm worked at any time during the last three years, state the
percentage that your firm was required to pay. You may provide an explanation for a percentage rate
higher than one percent, if you wish to do so.
5 points if the rate is no more than one per cent
3 points if the rate was no higher than 1.10 per cent.
0 points for any other answer.
27. During the last five years, has your firm ever been denied bond credit by a surety company, or has there ever
been a period of time when your firm had no surety bond in place during a public construction project when
one was required?
❑ Yes ❑ No
No = 5 points Yes = 0 points
Newman Downtown Plaza UNIFORM RATING SYSTEM AND PROCEDURES
RRM Project #1306540 Page 4
Scorable Questions from Part II.C. of the Questionnaire: Questions about compliance with safety, workers
compensation,prevailing wage and apprenticeship laws. 11 questions)
28. Has CAL OSHA or other comparable agency in another state cited and assessed penalties against your firm for
any "serious," "willful" or "repeat" violations of its safety or health regulations in the past five years?
Note: If you have filed an appeal of a citation and the Occupational Safety and Health Appeals Board has
not yet ruled on your appeal, you need not include information about it.
❑ Yes ❑ No
if the firm's average gross revenues for the last three years was less than $50 million, scoring is as
follows:
5 points for either "No" or "Yes" indicating 1 such instance.
3 points for "Yes" indicating 2 such instances.
0 points for Wes" if more than 2 such instances.
If the firm's average gross revenues for the last three years was more than $50 million, scoring is as
follows:
5 points for either "No" or "Yes" indicating 1, 2, or 3 such instances.
3 points for "Yes" indicating either 4 or 5 such instances.
0 points for "Yes" if more than 5 such instances.
29. Has the federal Occupational Safety and Health Administration cited and assessed penalties against your
firm in the past five years?
Note: If you have filed an appeal of a citation and the appropriate appeals Board has not yet ruled on
your appeal, you need not include information about it.
Yes ❑ No
If yes, attach a separate signed page describing each citation.
If the firm's average gross revenues for the last three years was less than $50 million, scoring is as
follows:
5 points for either "No" or "Yes" indicating 1 such instance.
3 points for "Yes" indicating 2 such instances.
0 points for "Yes" or if more than 2 such instances.
If the firm's average gross revenues for the last three years was more than $50 million, scoring is as
follows:
5 points for either "No" or "Yes" indicating 1, 2, or 3 such instances.
3 points for "Yes" indicating either 4 or 5 such instances.
0 points for "Yes" if more than 5 such instances.
30. Has the EPA or any Air Quality Management District or any Regional Water Quality Control Board cited
and assessed penalties against either your firm or the owner of a project on which your firm was the
contractor, in the past five years?
NOTE: If you have filed an appeal of a citation and the Appeals Board has not yet ruled on your appeal,
or if there is a court appeal pending, you need not include information about the citation.
❑ Yes ❑ No
Newman Downtown Plaza UNIFORM RATING SYSTEM AND PROCEDURES
RRM Project #1306540 Page 5
If the firm's average gross revenues for the last three years was less than $50 million, scoring is as
follows:
5 points for either "No" or "Yes" indicating 1 such instance.
3 points for "Yes" indicating 2 such instances.
0 points for "Yes" or if more than 2 such instances.
If the firm's average gross revenues for the last three years was more than $50 million, scoring is as
follows:
5 points for either "No" or "Yes" indicating 1, 2, or 3 such instances.
3 points for "Yes" indicating either 4 or 5 such instances.
0 points for "Yes" if more than 5 such instances.
31. How often do you require documented safety meetings to be held for construction employees and field
supervisors during the course of a project?
3 points for an answer of once each week or more often.
0 points for any other answer
32. List your firm's Experience Modification Rate (EMR) (California workers' compensation insurance) for each
of the past three premium years:
NOTE: An Experience Modification Rate is issued to your firm annually by your workers' compensation
insurance carrier.
Current year:
Previous year:
Year prior to previous year:
If your EMR for any of these three years is or was 1.00 or higher, you may, if you wish, attach a letter of
explanation.
NOTE: An Experience Modification Rate is issued to your firm annually by your workers' compensation
insurance carrier.
5 points for three-year average EMR of .95 or less
3 points for three-year average of EMR of more than.95 but no more than 1.00
0 points for any other EMR
33. Within the last five years, has there ever been a period when your firm had employees but was without
workers' compensation insurance or state-approved self-insurance?
❑ Yes ❑ No
5 points for either "No" or "Yes" indicating 1 such instance.
0 points for any other answer.
34. Has there been more than one occasion during the last five years on which your firm was required to pay
either back wages or penalties for your own firm's failure to comply with the state's prevailing wage laws?
❑ Yes ❑ No
NOTE: This question refers only to your own firm's violation of prevailing wage laws, not to violations of
the prevailing wage laws by a subcontractor.
Newman Downtown Plaza UNIFORM RATING SYSTEM AND PROCEDURES
RRM Project #1306540 Page 6
If your firm's average gross revenues for the last three years was less than $50 million, scoring is as
follows:
5 points for either "No," or "Yes" indicating either 1 or 2 such instance.
3 points for "Yes" indicating 3 such instances.
0 points for "Yes" and more than 3 such instances.
If your firm's average gross revenues for the last three years was more than $50 million, scoring is as
follows:
5 points for either "No" or "Yes" indicating no more than 4 such instances.
3 points for "Yes" indicating either 5 or 6 such instances.
0 points for "Yes" and more than 6 such instances.
35. During the last five years, has there been more than one occasion on which your own firm has been penalized
or required to pay back wages for failure to comply with the federal Davis-Bacon prevailing wage
requirements?
❑ Yes ❑ No
If your firm's average gross revenues for the last three years was less than $50 million, scoring is as
follows:
5 points for either "No," or "Yes" indicating either 1 or 2 such instance.
3 points for "Yes" indicating 3 such instances.
0 points for "Yes" and more than 3 such instances.
If your firm's average gross revenues for the last three years was more than $50 million, scoring is as
follows:
5 points for either "No" or "Yes" indicating no more than 4 such instances.
3 points for "Yes" indicating either 5 or 6 such instances.
0 points for "Yes" and more than 6 such instances.
36. Provide the name, address and telephone number of the apprenticeship program sponsor(s) (approved
by the California Division of Apprenticeship Standards) that will provide apprentices to your company for
use on any public work project for which you are awarded a contract by [Public Entity].
5 points if at least one approved apprenticeship program is listed.
0 points for any other answer.
37. If your firm operates its own State-approved apprenticeship program:
(a) Identify the craft or crafts in which your firm provided apprenticeship training in the past year.
(b) State the year in which each such apprenticeship program was approved, and attach evidence of
the most recent California Apprenticeship Council approval(s) of your apprenticeship program(s).
(c) State the number of individuals who were employed by your firm as apprentices at any time
during the past three years in each apprenticeship and the number of persons who, during the
past three years, completed apprenticeships in each craft while employed by your firm.
5 points if one or more persons completed an approved apprenticeship while employed by your firm.
Newman Downtown Plaza UNIFORM RATING SYSTEM AND PROCEDURES
RRM Project #1306540 Page 7
0 points if no persons completed an approved apprenticeship while employer by your firm.
38. At any time during the last five years, has your firm been found to have violated any provision of California
apprenticeship laws or regulations, or the laws pertaining to use of apprentices on public works?
NOTE: You may omit reference to any incident that occurred prior to January 1, 1998 if the violation was
by a subcontractor and your firm, as general contractor on a project, had no knowledge of the
subcontractor's violation at the time they occurred.
❑ Yes ❑ No.
If yes, provide the date(s) of such findings, and attach copies of the Department's final decision(s).
If your firm's average gross revenues for the last three years was less than $50 million, scoring is as
follows:
5 points for either "No," or "Yes" indicating either 1 or 2 such instance.
3 points for "Yes" indicating 3 such instances.
0 points for "Yes" and more than 3 such instances.
If your firm's average gross revenues for the last three years was more than $50 million, scoring is as
follows:
5 points for either "No" or "Yes" indicating no more than 4 such instances.
3 points for "Yes" indicating either 5 or 6 such instances.
0 points for "Yes" and more than 6 such instances.
Newman Downtown Plaza UNIFORM RATING SYSTEM AND PROCEDURES
RRM Project #1306540 Page 8
Scoring of Part III of the Questionnaire
See Exhibit B, Project Experience Interview Questions and Procedures, for interview questions and scoring guidelines.
Scoring of the attributes of each comparable project shall be as follows:
SCORING GUIDELINE
Project Attribute
5 points
3 points
i point
0 points
$1.OM to
$500K to
a. Contract Price
>_$2.OM
<$2.OM
<$1.0M
<$500K
b. Amount of Caltrans Roadway construction as
7.5% to
5% to
percentage of total contract price:
>_15%
<15%
<7.5%
<5%
c. Amount of refined colored concrete
pedestrian-oriented paving as percentage of
7.5% to
5% to
total contract price
>15%
<15%
<7.5%
<5%
d. Amount of brick paving, mortared and sand
2.5% to
1.5% to
set, as percentage of total contract price:
>5%
<5%
<2.5%
<1.5%
e. Amount of brick masonry walls and columns
2.5% to
1.5% to
as a percentage of the total contract price
?5%
<5%
<2.5%
<15%
f. Amount of architectural steel/ornamental
metal structures as percentage of total
2.5% to
contract price:
>_10%
5% to <10%
<5%
<25%
A prospective bidder must score a minimum of 20 points on the above attributes to be considered qualified.
Newman Downtown Plaza UNIFORM RATING SYSTEM AND PROCEDURES
RRM Project #1306540 Page 9
EXHIBIT D
BIDDER PRE-QUALIFICATION AND APPEAL PROCEDURES
FOR
THE NEWMAN DOWNTOWN PLAZA PROJECT
The Notice to Bidders for the Newman Downtown Plaza shall include language that is substantially similar to the
following:
NOTICE OF BIDDER PREQUALFICATION REQUIREMENT
Notice is hereby given that the City of Newman has determined that all bidders on Newman Downtown Plaza to be
undertaken by the City of Newman must be pre-qualified prior to submitting a bid on the project. It is mandatory that
all Contractors who intend to submit a bid, fully complete the pre-qualification questionnaire, provide all materials
requested herein, and be scored high enough to be approved by the City of Newman to be on the final qualified
Bidders list. No bid will be accepted from a Contractor that has failed to comply with these requirements. If two or
more business entities submit a bid as part of a Joint Venture, or expect to submit a bid as part of a Joint Venture, each
entity within the Joint Venture must be separately qualified to bid. The last date to submit a fully completed
questionnaire is 35 days prior to the bid closing date. Contractors are encouraged to submit pre-qualification packages
as soon as possible, so that they may be notified of omissions of information to be remedied or of their pre-
qualification status well in advance of the bid advertisement for this project.
Preaualification Procedure:
Answers to questions contained in the attached questionnaire, information about current bonding capacity, notarized
statement from surety, and the most recent reviewed or audited financial statements, with accompanying notes and
supplemental information, are required. City of Newman will use these documents as the basis of rating Contractors in
respect to qualifications to bid on this project. City of Newman reserves the right to check other sources available. City
of Newman's decision will be based on objective uniform evaluation criteria.
City of Newman reserves the right to adjust, increase, limit, suspend or rescind the pre-qualification rating based on
subsequently learned information. Contractors whose rating changes sufficient to disqualify them will be notified, and
given an opportunity for a hearing consistent with the hearing procedures described below for appealing a pre-
qualification rating.
While it is the intent of the pre-qualification questionnaire and documents required therewith to assist City of Newman
in determining bidder responsibility prior to bid and to aid City of Newman in selecting the lowest responsible bidder,
neither the fact of pre-qualification, nor any pre-qualification rating, will preclude City of Newman from a post-bid
consideration and determination of whether a bidder has the quality, fitness, capacity and experience to satisfactorily
perform the proposed work, and has demonstrated the requisite trustworthiness.
The pre-qualification packages should be submitted under seal and marked "CONFIDENTIAL" to the City of Newman's
City Clerle s office located at 1162 Main Street, Newman, CA 95360.
The pre-qualification packages (questionnaire answers and financial statements) submitted by Contractors are not
public records and are not open to public inspection. All information provided will be kept confidential to the extent
permitted by law. However, the contents may be disclosed to third parties for purpose of verification, or investigation
of substantial allegations, or in the appeal hearing. State law requires that the names of contractors applying for pre-
qualification status shall be public records subject to disclosure, and the first page of the questionnaire will be used for
that purpose.
Newman Downtown Plaza BIDDER PRE-QUALIFICATION AND APPEAL PROCEDURES
RRM Project #1306540 Page 1
Each questionnaire must be signed under penalty of perjury in the manner designated at the end of the form, by an
individual who has the legal authority to bind the Contractor on whose behalf that person is signing. If any information
provided by a Contractor becomes inaccurate, the Contractor must immediately notify City of Newman and provide
updated accurate information in writing, under penalty of perjury.
City of Newman reserves the right to waive minor irregularities and omissions in the information contained in the pre-
qualification application submitted, to make all final determinations, and to determine at any time that the pre-
qualification procedures will not be applied to a specific future public works project.
Contractors may submit pre-qualification packages during regular working hours on any day that the offices of City of
Newman are open. Contractors who submit a complete pre-qualification package will be notified of their qualification
status no later than ten business days after submission of the information.
City of Newman may refuse to grant pre-qualification where the requested information and materials are not provided,
or not provided by the required date stated above. There is no appeal from a refusal for an incomplete or late
application, but re-application for a later project is permitted. The closing time for bids will not be changed in order to
accommodate supplementation of incomplete submissions, or late submissions.
Appeal Procedure:
Where a timely and completed application results in a rating below that necessary to pre-qualify, an appeal can be
made. An appeal is begun by the Contractor delivering to the City of Newman's City Clerk's Office notice of its appeal of
the decision with respect to its pre-qualification rating, no later than ten business days prior to the closing time for the
receipt of bids for this public works project. Without a timely appeal, the Contractor waives any and all rights to
challenge the decision of City of Newman, whether by administrative process, judicial process or any other legal
process or proceeding.
If the Contractor gives the required notice of appeal and requests a hearing, the hearing shall be conducted so that it is
concluded no later than five business days after City of Newman's receipt of the notice of appeal, and no later than five
business days prior to the last date for the receipt of bids on the project. The hearing shall be an informal process
conducted by an outside hearing officer or a hearing panel established by the City Manager (the "Appeals Panel"). At
or prior to the hearing, the Contractor will be advised of the basis for the City of Newman's pre-qualification
determination. The Contractor will be given the opportunity to present information and present reasons in opposition
to the rating. Within one day after the conclusion of the hearing, the Appeals Panel will render its decision. It is the
intention of City of Newman that the date for the submission and opening of bids will not be delayed or postponed to
allow for completion of an appeal process.
Qualification of Subcontractors
NOTICE: To contractors who are using subcontractors for this job, please be advised that the City of Newman is
requiring qualification of subcontractors in the following crafts or trades, following acceptance of your bid, but before
the award is made:
a. Concrete Flatwork,
b. Brick Masonry Walls and Paving,
c. Architectural Steel Fabrication
Newman Downtown Plaza BIDDER PRE-QUALIFICATION AND APPEAL PROCEDURES
RRM Project #1306540 Page 2
Aitechment # 2-
PRE-QUALIFICATION OF CONTRACTORS
SEEKING TO BID ON PUBLIC WORKS
PROJECTS,
TABLE F CONTENTS
PAGE
INTRODUCTION AND OVERVIEW OF THE 1999 LAW AND ITS APPLICATION .............................1
1. Important Provisions Of The 1999 Law .........................................................2
H. Role of the Department of Industrial Relations ...........................................................2
III. An Overview Of The Documents In This Package .....................................................3
IV. Appeal Procedure ..........................................................................................................4
V. Application Of The Public Records Act .......................................................................5
VI. What Are The Law's Provisions Regarding Prequalification
Of Subcontractors ................................................................................................................5
MODEL PRE-QUALIFICATION QUESTIONNAIRE .........................................................................6
Contact Information ............................................................................................................7
Part I: Essential Requirements for Qualification .............................................................8
Part II: Organization, History, Organizational Performance,
Compliance with Civil and Criminal Laws ...........................................................10
A. Current Organization And Structure Of The Business .......................................10
B. History of The Business And Organizational Performance .................................11
C. Compliance With Occupational Safety And Health Laws
And With Other Labor Legislation Safety ...........................................................16
Part III. Recent Construction Projects Completed .....................................19
A LIST OF THE SCORABLE QUESTIONS AND THE SCORING INSTRUCTIONS ............................21
MODEL INTERVIEW QUESTIONS' ...........................................................35
INSTRUCTIONS FOR PUBLIC AGENCIES RE: INTERVIEW QUESTIONS ........................................38
REQUEST FOR PRE-QUALIFICATION OF BIDDERS COMMENCING WITH
FORTHCOMING PUBLIC WORK BID ............................................................................................41
ANNOUNCEMENT OF PRE-QUALIFICATION PROCEDURES AND
OPEN DATES FOR ANNUAL PRE-QUALIFICATION .....................................................................45
SOURCES FOR VERIFICATION OF INFORMATION GIVEN BY CONTRACTORS .............................49
ii
INTRODUCTION AND
OVERVIEW OF-THE LAw
AND ITS APPLICATION
I. UVIPORTANT PROVISIONS OFT 1999 LAW
In 1999, the Legislature enacted a law that allows many public agencies to require
licensed contractors that wish to bid for public works jobs to "pre-qualify" for the right to bid on
a specific public works project, or on public works project undertaken by a public agency during
a specified period of time. Public Contract Code section 20101 has the relevant provisions; it
was enacted as part of Assembly Bill 574.
The law applies to all cities, counties, and special districts but does not apply to K-12 school
districts (which have similar authority to create pre-qualification procedures, described in Public
Contract Code section 20111.5, which was enacted in 1997).1
The law does not require any public agency to adopt a pre-qualification system. Instead, it
authorizes every public agency to adopt a pre-qualification system, and describes certain
requirements that must be met (described below), if a public agency chooses to adopt such a system.
In fact, the 1999 law allows a public agency to establish two different kinds. of pre-
qualification procedures for public works projects. The law allows a public agency to establish a
pre-qualification procedure linked to a single project (Section 20101 [d]). Or, the public agency may
adopt a procedure by which a contractor may qualify to bid on projects which are put out for bid by
that agency for a period of one year after the date of initial pre-qualification. (Section 20101 [c]).
The law requires every public agency that creates either kind of pre-qualification
procedure to:
(1) use a "standardized questionnaire and financial statement in a form specified by the
public entity"(Section 20101 [a]);
(2) adopt and apply a uniform system of rating bidders on objective criteria, on the basis
of the completed questionnaires and financial statements (Section 20101 [b]);
(3) create an appeal procedure, by which a contractor that is denied pre-qualification may
seek a reversal of that determination. (Section 20101 [d]).
H. ROLE OF THE DEPARTMENT OF INDUSTRIAL RELATIONS
AB 574 required the Department of Industrial Relations (DIR) to "develop model guidelines
for rating bidders, and draft the standardized questionnaire." It required DIR to "consult with
affected public agencies, cities and counties, the construction industry, the surety industry, and other
interested parties."
' Community College Districts also have specific authority to carry out prequalification procedures, in Public
Contract Code section 20651.5, enacted in 1998. Community College Districts may also be covered by AB 574,
since they are not specifically exempted.
2
From January through October 2000, DIR held a series of meetings in Sacramento with
representatives of public agencies and other interested parties. Each meeting was attended by
more than 25 representatives of interested parties. All told, more than 60 people participated in
at least one such meeting, and most representatives participated in more than one. Contractors,
public agencies both large and small, and associations of each were well represented throughout
the series of meetings. DIR's initial draft of a questionnaire was revised after each meeting, and
each revised draft was discussed at the next meeting, leading to additional revisions. Eventually,
there was widespread consensus that the model questionnaire provided in this package offers a
system of rating bidders based on objective criteria, and a useful and appropriate series of
questions.
In addition, DIR, in compliance with the 1999 legislation, created model guidelines for
rating bidders. The model rating system also is included in this package.
III. AN OVERVIEW OFT DOCUMENTS IN THIS PACKAGE
Included in this package are:
1. A model questionnaire to be sent to contractors. The questionnaire includes spaces
for answers to be provided by the contractors, with the forms to be returned to the public agency.2
As required by the legislation, the information provided to the public agency by the contractors,
other than the names, addresses and contractor license numbers of the contractors applying - is to be
kept confidential
2. A model scoring system, for rating the answers given by the contractors and by the
references. Note: the documents provided here by DIR are designed to collect the information that a
public agency will need to carry out a pre-qualification procedure, and the DIR has proposed a
rating system. Each public agency, however, is free to devise its own "uniform system of rating
prospective bidders based on objective criteria." That is, each public agency may determine its
own scoring system and its own passing scores' for different portions of the questionnaire and for the
interviews.
3. A model series of questions to be used by representatives of the public agency when
interviewing persons who are identified by contractors as their "references" - owners of projects
that have been completed by each contractor in the recent past.
4. DIR's suggestions for procedures to be used for conducting the reference interviews.
5. Two alternative forms: model announcements of pre-qualification procedures. Each
is a summary and explanation of the pre-qualification procedure, prepared primarily for licensed
contractors, although available for the general public as well. There are two slightly different
versions of this document: one explains the pre-qualification procedure linked to a single project,3
2 The documents included in this package can be found at the Department of Industrial Relations web site,
www.dir.ca.gov. Click on "Data bases."
3 The explanation included in this document assumes that the prequalification procedure is taking place after the
RFP or project announcement is published. A public agency may choose, instead, to have the prequalification
while the other explains the procedure of pre-qualification valid for a year and for more than one
project.
6. A list of sources of information that may be used by a public agency to verify the
accuracy of many of the answers given by the contractors to the questions on the questionnaire a
IV. APPEAL PROCEDURE
Section 20101(d) requires every public agency that requires prospective bidders to
prequalify pursuant to this law to establish "a process that will allow prospective bidders to
dispute their proposed prequalification rating prior to the closing time for receipt of bids." The
appeal process must include written notification by the public agency of the basis for the
prospective bidder's disqualification "and any supporting evidence that has been received from
others or adduced as a result of an investigation by the public entity." (section 20101[d][I]). The
prospective bidder must be given an opportunity to rebut any evidence used as a basis for
disqualification and to present evidence to the public entity as to why the prospective bidder
should be found qualified." (section 20101[d][2]). The law does not describe the appeal
procedure in any additional detail; each public agency is free to adopt its own procedures, as
long as the statutory requirements are met. As an example, while Part I of the model
questionnaire includes nine "Essential Requirements for Qualification," a public agency may
choose to allow contractors to appeal a disqualification based solely on an answer to a question
in Part I.
DIR has devised two different schedules for appeal procedures. One schedule would be
used in a system for prequalification for a single project. The sequence of steps in this appeal
procedure are scheduled to allow for an appeal decision at least four business days prior to the
submission for bids for the single project. The other schedule for an appeal is applicable to a
system in which prospective bidders seek prequalification valid for one year, without a link to
the bidding on a specific project. These two appeal sequences are described in the explanation
to contractors (the two documents referred to in paragraph 5, above).
Each public agency should be certain that it distributes to licensed contractors only the
description that is appropriate for the prequalification procedures that are in use.
There are a number of laws and court decisions that affect the nature of an appeal hearing
provided by a public agency. Each public agency should consult its own attorneys for advice in this
area.
procedure start and end prior to the solicitation of bids for the specific project. If that is the case, the public agency
would have to modify the document offered here to explain the sequence of events.
4 A CAUTIONARY NOTE: The information that will be given to public agencies by contractors seeking pre-
qualification is provided under oath, with the understanding that the intentional providing of false information is, in
itself, grounds for disqualification. We expect that the information given should be and will be accepted at face value
in most instances. Our list of sources of information available to the public is provided for use in the few instances
in which a public agency reviewing the answers given in a questionnaire has specific reason to believe that one or
more answers should be verified in this manner.
4
V. APPLICATION OFT PUBLIC RECORDS ACT
AB 574 provides that "The questionnaires and financial statements shall not be public
records and shall not be open to public inspection; however, records of the names of contractors
applying for prequalification status shall be public records subject to disclosure" under the Public
Records Act. (Section 20101 [a]). The model questionnaire, forms provided by DIR indicate that the
cover page of each questionnaire is a public record, and that all other pages of the questionnaire are
not public records.
VI. WHAT ARE T LAW'S PROVISIONS REGARDING PREQUALIFICATION
OF SUBCONTRACTORS?
Public agencies are not required to pre-qualify sub-contractors, nor are public agencies
prohibited from doing so. Section 20101(f) says:
Nothing in this section shall preclude the awarding agency from prequalifying or
disqualifying a subcontractor. The disqualification by an awarding agency does not
disqualify an otherwise prequalified [general] contractor.
5
M[3,L)iAlL PRE-QUALIFICATICN
QUESTIONNAIRE
CONTACT INFORMATION
Firm Name:
(as it appears on license)
Check One:
❑ Corporation
❑ Partnership
Sole Prop.
Contact Person:
Address:
Phone:
If firm is a sole proprietor or partnership:
Owner(s) of Company
Contractor's License Number(s):
Fax:
7
PART I. ESSENTIAL REQUIREMENTS FOR QUAL CATION
Contractor will be immediately disqualified if the answer to any of questions I through
5 is "no."5
Contractor will be immediately disqualified if the answer to any of questions 6, 7, 8 or
9 is "Yes. ,6 If the answer to question 8 is "yes," and if debarment would be the sole
reason for denial of pre-qualification, any pre-qualification issued will exclude the
debarment period.
1. Contractor possesses a valid and current California Contractor's license for the project or
projects for which it intends to submit a bid.
❑ Yes ❑ No
2. Contractor has a liability insurance policy with a policy limit of at least $1,000,000 per
occurrence and $2,000,000 aggregate.
❑ Yes ❑ No
3. Contractor has current workers' compensation insurance policy as required by the Labor
Code or is legally self-insured pursuant to Labor Code section 3700 et. seq.
❑ Yes ❑ No F1 Contractor is exempt from this requirement, because it has no
employees
4. Have you attached your latest copy of a reviewed or audited financial statement with
accompanying notes and supplemental information.7
❑ Yes ❑ No
NOTE: A financial statement that is not either reviewed or audited is not acceptable.
A letter verifying availability of a line of credit may also be attached; however, it will
be considered as supplemental information only, and is not a substitute for the
required financial statement.
5. Have you attached a notarized statement from an admitted surety insurer (approved by the
California Department of Insurance) and authorized to issue bonds in the State of California,
which states: (a) that your current bonding capacity is sufficient for the project for which
5 A "no" answer to Question 4 will not be disqualifying if the contractor is exempt from complying with
Question 4, for reasons explained in footnote 7.
e A contractor disqualified solely because of a "Yes" answer given to question 6, 7, or 9 may appeal the
disqualification and provide an explanation of the relevant circumstances during the appeal procedure.
7 Public Contract Code section 20101(e) exempts from this requirement a contractor who has qualified as a
small business pursuant to Government Code section 14837(d)(1), if the bid is "no more than 25 per cent of the
qualifying amount provided in section 14837(d)(1)." As of January 1, 2001, the qualifying amount is $10 million,
and 25 per cent of that amount, therefore, is $2.5 million.
you seek pre-qualification if you are seeking pre-qualification for a single project; or (if you
are seeking pre-qualification valid for a year) (b) your current available bonding capacity ?8
Q Yes ❑ No
NOTE: Notarized statement must be from the surety company, not an agent or
broker.
6. Has your contractor's license been revoked at any time in the last five years?
❑ Yes ❑ No
7. Has a surety firm completed a contract on your behalf, or paid for completion because your
firm was default terminated by the project owner within the last five (5) years?
❑ Yes ❑ No
8. At the time of submitting this pre-qualification form, is your firm ineligible to bid on or be
awarded a public works contract, or perform as a subcontractor on a public works contract,
pursuant to either Labor Code section 1777.1 or Labor Code section 1777.7?
❑ Yes ❑ No
If the answer is "Yes," state the beginning and ending dates of the period of debarment:
9. At any time during the last five years, has your firm, or any of its owners or officers been
convicted of a crime involving the awarding of a contract of a government construction
project, or the bidding or performance of a government contract?
❑ Yes ❑ No
' An additional notarized statement from the surety may be requested by Public Entity at the time of
submission of a bid, if this pre-qualification package is submitted more than 60 days prior to submission of the bid.
PART H. ORGANIZATION, STORY, ORGANIZATIONAL PERFORMANCE,
COMPLIANCE WITH CIVIL AND CRIMINAL LAWS
A. Current Organization and Structure of the Business
For Firms That Are Corporations:
I a. Date incorporated :
lb. Under the laws of what state:
lc. Provide all the following information for each person who is either (a) an officer of the
corporation (president, vice president, secretary, treasurer), or (b) the owner of at least ten
per cent of the co oration's stock.
Name Position Years with Co. % Ownership Social Security #
ld. Identify every construction firm that any person listed above has been associated with (as
owner, general partner, limited partner or officer) at any time during the last five years.
NOTE: For this question, "owner" and "partner" refer to ownership of ten per cent or
more of the business, or 10 per cent or more of its stock, if the business is a
I:UC U1 AL1U11.
Dates of Person's Participation
Person's Name Construction Firm with Firm
For Firms That Are Partnerships:
I a. Date of formation:
lb. Under the laws of what state:
I c. Provide all the following information for each partner who owns 10 per cent or more of the
firm.
Name Position Years with Co. % Ownership Social Security
10
Id. Identify every construction company that any partner has been associated with (as owner,
general partner, limited partner or officer) at any time during the last five years.
NOTE: For this question, "owner" and "partner" refer to ownership of ten per cent or
more of the business, or ten per cent or more of its stock, if the business is a
Dates of Person's Participation
Person's Name Construction Company with Company
For Firms That Are Sole Proprietorshins:
Ia. Date of commencement of business.
lb. Social security number of company owner.
lc. Identify every construction firm that the business owner has been associated with (as owner,
general partner, limited partner-or officer) at any time during the last five years.
NOTE: For this question, "owner" and "partner" refer to ownership of ten per cent or
more of the business, or ten per cent or more of its stock, if the business is a
Dates of Person's Participation
Person's Name Construction Company with Company
For Firms That Intend to Make a Bid as Part of a Joint Venture:
Ia. Date of commencement of joint venture.
lb. Provide all of the following information for each firm that is a member of the joint venture
that expects to bid on one or more ro ects:
Name of firm % Ownership of Joint Venture
B. History of the Business and Organizational Performance
2. Has there been any change in ownership of the firm at any time during the last three years?
NOTE: A corporation whose shares are publicly traded is not required to answer this
question.
11
❑ Yes ❑ No
If "yes," explain on a separate signed page.
3. Is the firm a subsidiary, parent, holding company or affiliate of another construction firm?
NOTE: Include information about other firms if one firm owns 50 per cent or more of
another, or if an owner, partner, or officer of ,your firm holds a similar position in
another firm.
❑ Yes ❑ No
If "yes," explain on a separate signed page.
4. Are any corporate officers, partners or owners connected to any other construction firms.
NOTE: Include information about other firms if an owner, partner, or officer of your
firm holds a similar position in another firm.
❑ Yes ❑ No
If "yes," explain on a separate signed page.
5. State your firm's gross revenues for each of the last three years:
6. How many years has your organization been in business in California as a contractor under
your present business name and license number? years
7. Is your firm currently the debtor in a bankruptcy case?
❑ Yes ❑ No
If "yes," please attach a copy of the bankruptcy petition, showing the case number, and the
date on which the petition was filed.
Was your firm in bankruptcy at any time during the last five years? (This question refers
only to a bankruptcy action that was not described in answer to question 7, above)
❑ Yes ❑ No
If "yes," please attach a copy of the bankruptcy petition, showing the case number and
the date on which the petition was filed, and a copy of the Bankruptcy Court's discharge
order, or of any other document that ended the case, if no discharge order was issued.
Licenses
9. List all California construction license numbers, classifications and expiration dates of
the California contractor licenses held by your firm:
12
10. If any of your firm's license(s) are held in the name of a corporation or partnership, list
below the names of the qualifying individual(s) listed on the CSLB records who meet(s) the
experience and examination requirements for each license.
11. Has your firm changed names or license number in the past five years?
❑ Yes ❑ No
If "yes," explain on a separate signed page, including the reason for the change.
12. Has any owner, partner or (for corporations:) officer of your firm operated a construction
firm under any other name in the last five years?
❑ Yes ❑ No
If "yes," explain on a separate signed page, including the reason for the change.
13. Has any CSLB license held by your firm or its Responsible Managing Employee (RIv1E)
or Responsible Managing Officer (RMO) been suspended within the last five years?
❑ Yes ❑ No
If "yes," please explain on a separate signed sheet.
Disputes
14. At any time in the last five years has your firm been assessed and paid liquidated
damages after completion of a project under a construction contract with either a public
or private owner?
❑ Yes ❑ No
If yes, explain on a separate signed page, identifying all such projects by owner, owner's
address, the date of completion of the project, amount of liquidated damages assessed and
all other information necessary to fully explain the assessment of liquidated damages.
15. In the last five years has your firm, or any firm with which any of your company's owners,
officers or partners was associated, been debarred, disqualified, removed or otherwise
prevented from bidding on, or completing, any government agency or public works project
for any reason?
NOTE: "Associated with" refers to another construction firm in which an owner,
partner or officer of your firm held a similar position, and which is listed in response
to question lc or Id on this form.
❑ Yes ❑ No
If "yes," explain on a separate signed page. State whether the firm involved was the firm
applying for pre-qualification here or another firm. Identify by name of the company, the
name of the person within your firm who was associated with that company, the year of the
event, the owner of the project, the project and the basis for the action.
16. In the last five years has your firm been denied an award of a public works contract based on
a finding by a public agency that your company was not a responsible bidder?
13
Yes ❑ No
If "yes," explain on a separate signed page. Identify the year of the event, the owner, the
project and the basis for the finding by the public agency.
17. In the past five years has any claim against your firm concerning your firm's work on a
construction project been filed in court or arbitration?
Yes ❑ No
If "yes," on separate signed sheets of paper identify the claim(s) by providing the project
name, date of the claim, name of the claimant, a brief description of the nature of the
claim, the court in which the case was filed and a brief description of the status of the
claim (pending or, if resolved, a brief description of the resolution).
18. In the past five years has your firm made any claim against a project owner concerning
work on a project or payment for a contract and filed that claim in court or arbitration?
❑ Yes ❑ No
If "yes," on separate signed sheets of paper identify the claim by providing the project
name, date of the claim, name of the entity (or entities) against whom the claim was filed,
a brief description of the nature of the claim, the court in which the case was filed and a
brief description of the status of the claim (pending, or if resolved, a brief description of
the resolution).
19. At any time during the past five years, has any surety company made any payments on
your firm's behalf as a result of a default, to satisfy any claims made against a
performance or payment bond issued on your firm's behalf, in connection with a
construction project, either public or private?
Yes ❑ No
If "yes," explain on a separate signed page the amount of each such claim, the name and
telephone number of the claimant, the date of the claim, the grounds for the claim, the
present status of the claim, the date of resolution of such claim if resolved, the method by
which such was resolved if resolved, the nature of the resolution and the amount, if any,
at which the claim was resolved.
20. In the last five years has any insurance carrier, for any form of insurance, refused to renew
the insurance policy for your firm?
❑ Yes ❑ No
14
If "yes," explain on a separate signed page. Name the insurance carrier,
the form of insurance and the year of the refusal.
Criminal Matters and Related Civil Suits
21. Has your firm or any of its owners, officers or partners ever been found liable in a civil
suit or found guilty in a criminal action for making any false claim or material
misrepresentation to any public agency or entity?
❑ Yes ❑ No
If "yes," explain on a separate signed page, including identifying who was involved, the
name of the public agency, the date of the investigation and the grounds for the finding.
22. Has your firm or any of its owners, officers or partners ever been convicted of a crime
involving any federal, state, or local law related to construction?
Yes ❑ No
If "yes," explain on a separate signed page, including identifying who was involved, the
name of the public agency, the date of the conviction and the grounds for the conviction.
23. Has your firm or any of its owners, officers or partners ever been convicted of a federal
or state crime of fraud, theft, or any other act of dishonesty?
❑ Yes ❑ No
If "yes," identify on a separate signed page the person or persons convicted, the court (the
county if a state court, the district or location of the federal court), the year and the criminal
conduct.
Bonding
24. Bonding capacity: Provide documentation from your surety identifying the following:
Name of bonding company/surety:
Name of surety agent, address and telephone number:
25. If your firm was required to pay a premium of more than one per cent for a performance
and payment bond on any project(s) on which your firm worked at any time during the
last three years, state the percentage that your firm was required to pay. You may
provide an explanation for a percentage rate higher than one per cent, if you wish to do
so.
15
26. List all other sureties (name and full address) that have written bonds for your firm during
the last five years, including the dates during which each wrote the bonds:
27. ~ During the last five years, has your firm ever been denied bond coverage by a surety
company, or has there ever been a period of time when your firm had no surety bond in
place during a public construction project when one was required?
❑ Yes ❑ No
If yes, provide details on a separate signed sheet indicating the date when your firm was
denied coverage and the name of the company or companies which denied coverage; and
the period during which you had no surety bond in place.
C. Compliance with Occupational Safety and Health Laws and with Other Labor
Legislation Safety
28. Has CAL OSHA cited and assessed penalties against your firm for any "serious,"
"willful" or "repeat" violations of its safety or health regulations in the past five years?
NOTE: If you have filed an appeal of a citation, and the Occupational Safety and
Health Appeals Board has not yet ruled on your appeal, you need not include
information about it.
Yes ❑ No
If "yes," attached a separate signed page describing the citations, including information
about the dates of the citations, the nature of the violation, the project on which the
citation(s) was or were issued, the amount of penalty paid, if any. If the citation was
appealed to the Occupational Safety and Health Appeals Board and a decision has been
issued, state the case number and the date of the decision.
29. Has the federal Occupational Safety and Health Administration cited and assessed
penalties against your firm in the past five years?
NOTE: If you have filed an appeal of a citation and the Appeals Board has not yet
ruled on your appeal, or if there is a court appeal pending, you need not include
information about the citation.
❑ Yes ❑ No
If "yes," attach a separate signed page describing each citation.
30. Has the EPA or any Air Quality Management District or any Regional Water Quality
Control Board cited and assessed penalties against either your firm or the owner of a
project on which your firm was the contractor, in the past five years?
16
DOTE: If you have filed an appeal of a citation and the Appeals Board has not yet
ruled on your appeal, or if there is a court appeal pending, you need not include
information about the citation.
Yes ❑ No
If "yes," attach a separate signed page describing each citation.
31. How often do you require documented safety meetings to be held for construction
employees and field supervisors during the course of a project?
32. List your firm's Experience Modification Rate (EMR) (California workers'
compensation insurance) for each of the past three premium years:
NOTE: An Experience Modification Rate is issued to your firm annually by your
workers' compensation insurance carrier.
Current year:
Previous year:
Year prior to previous year:
If your EMR for any of these three years is or was 1.00 or higher you may, if you wish,
attach a letter of explanation.
33. Within the last five years has there ever been a period when your firm had employees but
was without workers' compensation insurance or state-approved self-insurance?
0 Yes ❑ No
If "yes," please explain the reason for the absence of workers' compensation insurance on a
separate signed page. If "No," please provide a statement by your current workers'
compensation insurance carrier that verifies periods of workers' compensation insurance
coverage for the last five years. (If your firm has been in the construction business for less
than five years, provide a statement by your workers' compensation insurance carrier
verifying continuous workers' compensation insurance coverage for the period that your
firm has been in the construction business.)
Prevailing Wage and Apprenticeship Compliance Record
34. Has there been more than one occasion during the last five years in which your firm was
required to pay either back wages or penalties for your own firm's failure to comply with the
state's prevailing wage laws?
NOTE: This question refers only to your own firm's violation of prevailing wage laws,
not to violations of the prevailing wage laws by a subcontractor.
❑ Yes ❑ No
17
If "yes," attach a separate signed page or pages, describing the nature of each violation,
identifying the name of the project, the date of its completion, the public agency for which it
was constructed; the number of employees who were initially underpaid and the amount of
back wages and penalties that you were required to pay.
35. During the last five years, has there been more than one occasion in which your own firm
has been penalized or required to pay back wages for failure to comply with the federal
Davis-Bacon prevailing wage requirements?
❑ Yes ❑ No
If "yes," attach a separate signed page or pages describing the nature of the violation,
identifying the name of the project, the date of its completion, the public agency for
which it was constructed; the number of employees who were initially underpaid, the
amount of back wages you were required to pay along with the amount of any penalty
paid.
36. Provide the name, address and telephone number of the apprenticeship program
(approved by the California Apprenticeship Council) from whom you intend to request
the dispatch of apprentices to your company for use on any public work project for which
you are awarded a contract by [Public EntiW.
37. If your firm operates its own State-approved apprenticeship program:
(a) Identify the craft or crafts in which your firm provided apprenticeship training in
the past year.
(b) State the year in which each such apprenticeship program was approved, and
attach evidence of the most recent California Apprenticeship Council approval(s)
of your apprenticeship program(s).
(c) State the number of individuals who were employed by your firm as apprentices
at any time during the past three years in each apprenticeship and the number of
persons who, during the past three years, completed apprenticeships in each craft
while employed by your firm.
18
38. At any time during the last five years, has your firm been found to have violated any
provision of California apprenticeship laws or regulations, or the laws pertaining to use of
apprentices on public works?
NOTE: You may omit reference to any incident that occurred prior to January 1,
1998, if the violation was by a subcontractor and your firm, as general contractor on
a project, had no knowledge of the subcontractor's violation at the time they
occurred.
❑ Yes ❑ No
If "yes," provide the date(s) of such findings, and attach copies of the Department's final
decision(s).
PART M. RECENT CONSTRUCTION PROJECTS CO LETED
39. Contractor shall provide information about its six most recently completed public works
projects and its three largest completed private projects within the last three years.9 Names
and references must be current and verifiable. Use separate sheets of paper that contain all
of the following information:
Project Name:
Location:
Owner:
Owner Contact (name and current phone number):
Architect or Engineer:
Architect or Engineer Contact (name and current phone number):
Construction Manager (name and current phone number):
9 If you wish, you may, using the same format, also provide information about other projects that you have
completed that are similar to the project(s) for which you expect to bid.
19
Description of Project, Scope of Work Performed:
Total Value of Construction (including change orders):
Original Scheduled Completion Date:
Time Extensions Granted (number of days):
Actual Date of Completion:
I, the undersigned, certify and declare that I have read all the foregoing answers to
this prequalification questionnaire and know their contents. The matters stated in the
questionnaire answers are true of my own knowledge and belief, except as to those matters
stated on information and belief, and as to those matters I believe them to be true. I declare
under penalty of perjury under the laws of the State of California, that the foregoing is
correct.
Dated:
(Name)
20
A IS'O' OF THE SCORABLE
QUESTIONS AND THE SCORING
INSTRUCTIONS
21
A LIST OFT SCO LE QUESTIONS AND T SCORING INSTRUCTIONS
The scorable questions arise in three different areas:
(I) History of the business and organizational performance;
(II) Co alliance with occupational safety and health laws workers' compensation and
other labor legislation; and
(III) Completion of recent projects and qualit~of performance.
The interview questions (interviews by the public agency of project managers on projects
completed recently by the contractor) are included in group III. In a pre-qualification
procedure for a single project, this last category would also include a scoring of the
number of recently completed projects that are similar to the project on which pre-
qualification is at issue. However, scoring linked to the similarity of past projects would
probably not be possible or useful if the public agency as part of a procedure to pre-
qualify contractors for an extended period.
Note: Not all questions in the questionnaire are scorable; some questions simply ask for
information about the contractor firm's structure, officers and history. This document
includes only those questions that are "scorable." The question numbers in this document
are the numbers used in the questionnaire. Thus, the questions included here begin with
question number 6, and there are a few breaks in the numerical sequence.
The Scores Needed for Prequalification
To prequalify, a contractor would be required to have a passing grade within each of the
three large categories referred to above.
For Section I, "History of the business and organizational performance,"
DIR recommends use of a passing score of 57 on this portion of the questionnaire (of a
maximum score of 76 on this portion of the questionnaire).
For Section II, Compliance with occupational safety and health laws, workers'
compensation and other labor legislation DIR recommends use of a passing score of 35
on this portion of the questionnaire (of a maximum score of 53 points on this portion of
the questionnaire).
Section III, Completion of recent projects and quality of performance, includes a series of
interview questions, and may also include questions about recently completed (public or
private) construction projects. For the interview questions, DIR recommends that a
public agency interview project managers for the owners of two completed projects.
DIR recommends a scoring system that would allow a maximum score of 120 points for
each interview. For these questions, DIR recommends qualification for a contractor
whose score on each of two interviews is 72 points or more; a denial of pre-qualification
22
for a contractor whose score on either interview is less than 55 points; and an additional
interview with another reference if the score resulting from one interview is between 55
points and 72 points.
DIR makes no recommendation about how to score a contractor's answers about
recently completed past projects. Because of the wide range of projects that a public
agency may be planning, and the similarly wide range in the skills, abilities, and
experience that a public agency will consider most important for a pending project, it is
impossible to propose a useful model scoring system to apply to the answers given about
a contractor's completed projects.
Questions about History of the Business and Organizational Performance
(16 questions)
1. How many years has your organization been in business in California as a contractor under
your present business name and license number? years
3 years or more = 2 points
4 years = 3 points S years = 4 pts
6 years or more = 5 points
2. Is your firm currently the debtor in a bankruptcy case?
❑ Yes ❑ No
"No" = 3 points" "Yes" = 0 points
3. Was your firm in bankruptcy any time during the last five years? (This question refers
only to a bankruptcy action that was not described in answer to question 7, above).
❑ Yes ❑ No
"No" = 3 points" "yes" = ® points
4. Has any CSLB license held by your firm or its Responsible Managing Employee (RME)
or Responsible Managing Officer (RMO) been suspended within the last five years?
❑ Yes ❑ No
No = 5 points Yes = 0 points
23
5. At any time in the last five years, has your firm been assessed and paid liquidated
damages after completion of a project, under a construction contract with either a public
or private owner?
❑ Yes ❑ No
No projects with liquidated damages of more than $50,000, or one project with liquidated
damages = 5 points.
Two projects with liquidated damages of more than $50,000 = 3 points
Any other answer. no points
6. In the last five years has your firm, or any firm with which any of your company's owners,
officers or partners was associated, been debarred, disqualified, removed or otherwise
prevented from bidding on, or completing, any government agency or public works project
for any reason?
NOTE: "Associated with" refers to another construction firm in which an owner,
partner or officer of your firm held a similar position, and which is listed in response
to question lc or ld on this form.
❑ Yes ❑ No
No = 5 points Yes = 0 points
7. In the last five years, has your firm been denied an award of a public works contract based
on a finding by a public agency that your company was not a responsible bidder?
❑ Yes ❑ No
No = 5 points Yes = 0 points
24
In the past five years, has any claim against your firm concerning your firm's work on a
construction project, been filed in court or arbitration?
❑ Yes ❑ No
If the firm's average gross revenue for the last three years was less than
$50 million, scoring is as follows:
5 points for either "No" or "Yes" indicating I such instance.
3 points for "Yes" indicating 2 such instances.
0 points for "Yes" if more than 2 such instances.
If your firm's average gross revenue for the last three years was more than $50
million, scoring is as follows:
5 points for either "No" or "Yes" indicating 1, 2, or 3 such instances.
3 points for "Yes" indicating either 4 or 5 such instances
0 points for "Yes" if more than 5 such instances.
9. In the past five years, has your firm made any claim against a project owner concerning
work on a project or payment for a contract, and filed that claim in court or
arbitration?
❑ Yes ❑ No
If your firm's average gross revenues for the last three years was less than $50 million
scoring is as follows:
5 points for either "No" or "Yes" indicating I such instance.
3 points for "Yes" indicating 2 such instances.
0 points for "Yes" if more than 2 such instances.
If your firm's average gross revenues for the last three years was more than $50
million, scoring is as follows:
5 points for either "No" or "Yes" indicating 1, 2, or 3 such instances.
3 points for "Yes" indicating either 4 or 5 such instances.
0 points for "Yes" if more than 5 such instances.
25
10. At any time during the past five years, has any surety company made any payments on
your firm's behalf as a result of a default, to satisfy any claims made against a
performance or payment bond issued on your firm's behalf in connection with a
construction project, either public or private?
❑ Yes ❑ No
5 points for either "No" or "Yes" indicating I such claim.
3 points for "Yes" indicating no more than 2 such claims
Subtract five points for "Yes" if more than 2 such claims
11. In the last five years, has any insurance carrier, for any form of insurance, refused to
renew the insurance policy for your firm?
❑ Yes ❑ No
5 points for either "No" or "Yes" indicating I such instance.
3 points for "Yes" indicating 2 such instances.
0 points for "Yes" or if more than -2 such instances.
12. Has your firm, or any of its owners, officers, or partners ever been found liable in a civil
suit, or found guilty in a criminal action, for making any false claim or material
misrepresentation to any public agency or entity?
❑ Yes ❑ No
No = 5 points Yes= subtract 5 points
13. Has your firm, or any of its owners, officers or partners ever been convicted of a crime
involving any federal, state, or local law related to construction?
❑ Yes ❑ No
No = 5 points Yes= subtract 5 points
14. Has your firm or any of its owners, officers or partners ever been convicted of a federal or
state crime of fraud, theft, or any other act of dishonesty?
❑ Yes ❑ No
N.o = 5 points Yes= subtract 5 points
26
15. If your firm was required to pay a premium of more than one per cent for a performance
and payment bond on any project(s) on which your firm worked at any time during the
last three years, state the percentage that your firm was required to pay. You may
provide an explanation for a percentage rate higher than one per cent, if you wish to do
so.
5 points if the rate is no more than one per cent
3 points if the rate was no higher than 1:10 per cent.
0 points for any other answer.
16. During the last five years, has your firm ever been denied bond credit by a surety company,
or has there ever been a period of time when your firm had no surety bond in place during a
public construction project when one was required?
❑ Yes ❑ No
No = 5 points Yes = 0 points
Questions about compliance with safety, workers compensation,
prevailing wage and apprenticeship laws.
(11 questions)
Has CAL OSHA cited and assessed penalties against your firm for any "serious," "willful"
or "repeat" violations of its safety or health regulations in the past five years?
Note: If you have filed an appeal of a citation and the Occupational Safety and Health
Appeals Board has not yet ruled on your appeal, you need not include information
about it.
Yes ❑ No
If the firm's average gross revenues for the last three years was less than $50 million,
scoring is as follows:
5 points for either "No" or "Yes" indicating 1 such instance.
3 points for "Yes" indicating 2 such instances.
0 points for "Yes" if more than 2 such instances.
If the firm's average gross revenues for the last three years was more than $50 million,
scoring is as follows:
5 points for either "No" or "Yes" indicating 1, 2, or 3 such instances.
3 points for "Yes" indicating either 4 or 5 such instances.
0 points for "Yes" if more than 5 such instances.
27
2. Has the federal Occupational Safety and Health Administration cited and assessed
penalties against your firm in the past five years?
Note: If you have filed an appeal of a citation and the appropriate appeals Board
has not yet ruled on your appeal, you need not include information about it.
❑ Yes ❑ No
If yes, attach a separate signed page describing each citation.
If the firm's average gross revenues for the last three years was less than $50 million,
scoring is as follows:
5 points far either "No" or "Yes" indicating I such instance.
3 points for "Yes" indicating 2 such instances.
0 points for "Yes" or if more than 2 such instances.
If the firm's average gross revenues for the last three years was more than $50
million, scoring is as follows:
5 points for either "No" or "Yes" indicating 1, 2, or 3 such instances.
3 points for "Yes" indicating either 4 or 5 such instances.
0 points for "Yes" if more than 5 such instances
3. Has the EPA or any Air Quality Management District or any Regional Water Quality
Control Board cited and assessed penalties against either your firm or the owner of a
project on which your firm was the contractor, in the past five years?
NOTE: If you have filed an appeal of a citation and the Appeals Board has not yet
ruled on your appeal, or if there is a court appeal pending, you need not include
information about the citation.
❑ Yes ❑ No
If the firm's average gross revenues for the last three years was less than $50 million,
scoring is as follows:
5 points for either "No" or "Yes" indicating I such instance.
3 points for "Yes" indicating 2 such instances.
0 points for "Yes" or if more than 2 such instances.
If the firm's average gross revenues for the last three years was more than $50 million,
scoring is as follows:
5 points for either "No" or "Yes" indicating 1, 2, or 3 such instances.
3 points for "Yes" indicating either 4 or 5 such instances.
0 points for "Yes" if more than 5 such instances.
28
4. How often do you require documented safety meetings to be held for construction
employees and field supervisors during the course of a project?
3 points for an answer of once each week or more often.
0 points for any other answer
5. List your firm's Experience Modification Rate (EMR) (California workers' compensation
insurance) for each of the past three premium years:
NOTE: An Experience Modification Date is issued to your firm annually by your
workers' compensation insurance carrier.
Current year:
Previous year:
Year prior to previous year:
If your EMR for any of these three years is or was 1.00 or higher, you may, if you wish,
attach a letter of explanation.
NOTE: An Experience Modification Rate is issued to your firm annually by your
workers' compensation insurance carrier.
5 points for three-year average EMR of.95 or less
3 points for three-year average of EMR of more than.95 but no more than 1.00
0 points for any other EMB
6. Within the last five years, has there ever been a period when your firm had employees but
was without workers' compensation insurance or state-approved self-insurance?
❑ Yes F-1 No
5 points for either "No" or "Yes" indicating I such instance.
0 points for any other answer.
29
7. Has there been more than one occasion during the last five years on which your firm was
required to pay either back wages or penalties for your own firm's failure to comply with the
state's prevailing wage laws?
❑ Yes ❑ No
NOTE: This question refers only to your own firm's violation of prevailing wage laws,
not to violations of the prevailing wage laws by a subcontractor.
If your firm's average gross revenues for the last three years was less than $50 million,
scoring is as follows:
5 points for either "No," or "Yes" indicating either I or 2 such instance.
3 points for "Yes" indicating 3 such instances.
0 points for "Yes" and more than 3 such instances.
If your firm's average gross revenues for the last three years was more than $50
million, scoring is as follows:
5 points for either "No" or "Yes" indicating no more than 4 such instances.
3 points for "Yes" indicating either 5 or 6 such instances.
0 points for "Yes" and more than 6 such instances.
8. During the last five years, has there been more than one occasion on which your own firm
has been penalized or required to pay back wages for failure to comply with the federal
Davis-Bacon prevailing wage requirements?
❑ Yes ❑ No
If your firm's average gross revenues for the last three years was less than $50 million,
scoring is as follows:
5 points for either "No," or "Yes" indicating either 1 or 2 such instance.
3 points for "Yes" indicating 3 such instances.
0 points for "Yes" and more than 3 such instances.
If your firm's average gross revenues for the last three years was more than $50
million, scoring is as follows:
5 points for either "No" or "Yes" indicating no more than 4 such instances.
3 points for "Yes" indicating either 5 or 6 such instances.
0 points for "Yes" and more than 6 such instances.
30
9. Provide the name, address and telephone number of the apprenticeship program
sponsor(s) (approved by the California Division of Apprenticeship Standards) that will
provide apprentices to your company for use on any public work project for which you
are awarded a contract by [Public Entity].
5 points if at least one approved apprenticeship program is listed.
0 paints for any other answer.
10. If your firm operates its own State-approved apprenticeship program:
(a) Identify the craft or crafts in which your firm provided apprenticeship training in
the past year.
(b) State the year in which each such apprenticeship program was approved, and
attach evidence of the most recent California Apprenticeship Council approval(s)
of your apprenticeship program(s).
(c) State the number of individuals who were employed by your firm as apprentices
at any time during the past three years in each apprenticeship and the number of
persons who, during the past three years, completed apprenticeships in each craft
while employed by your firm.
5 points if one or more persons completed an approved apprenticeship while employed
by your firm.
O points if no persons completed an approved apprenticeship while employer by your
firm.
31
11. At any time during the last five years, has your firm been found to have violated any
provision of California apprenticeship laws or regulations, or the laws pertaining to use of
apprentices on public works?
NOTE: You may omit reference to any incident that occurred prior to January 1,
1998 if the violation was by a subcontractor and your firm, as general contractor on
a project, had no knowledge of the subcontractor's violation at the time they
occurred.
❑ Yes ❑ No.
If yes, provide the date(s) of such findings, and attach copies of the Department's final
decision(s).
If your firm's average gross revenues for the last three years was less than $50 million,
scoring is as follows:
5 points for either "No," or "Yes" indicating either I or 2 such instance.
3 points for "Yes" indicating 3 such instances.
0 points for "Yes" and more than 3 such instances.
If your firm's average gross revenues for the last three years was more than $50
million, scoring is as follows:
5 points for either "No" or "Yes" indicating no more than 4 such instances.
3 points for "Yes" indicating either 5 or 6 such instances.
0 points for "Yes" and more than 6 such instances.
32
Questions concerning recent construction projects completed:
(one question, plus 11 interview questions)
The following question to be scored only where a public agency is undertaking a pre-
qualification procedure valid for a single project only.
1. Contractor shall provide information about its six most recently completed public works
projects and its three largest completed private projects within the last three years.'() Names
and references must be current and verifiable. Use separate sheets of paper that contain all
of the following information:
Project Name:
Location:
Owner:
Owner Contact (name and current phone number):
Architect or Engineer:
Architect or Engineer Contact (name and current phone number):
Construction Manager (name and current phone number):
Description of Project, Scope of Work Performed:
Total Value of Construction (including change orders):
Original Scheduled Completion Date:
Time Extensions Granted (number of days):
Actual Date of Completion:
io If you wish, you may, using the same format, also provide information about other projects that you have
completed that are similar to the project(s) for which you expect to bid.
33
Scoring of previous projects completed:
For pre-qualification for a single project that may require specific skills and capabilities,
public agencies may choose to score contractors for the number of similar projects
completed, and the degree of similarity between past projects and the planned project.
DIR has not suggested any scoring for this aspect of the pre-qualification process,
because of the numerous possible variations in both the type of project to be built and the
points of similarity between the pending project and past projects that may be significant
to the public agency.
34
MODEL
INTERVIEW
QUESTIONS
35
MODEL INTERVIEW QUESTIONS
The following questions will be used to interview randomly selected contacts from at least two
completed projects. [Public Entity) will conduct the interviews. No action on the contractor's
part is necessary. These questions are included on the package given to the contractor for
information only.
The highest possible score is 120 Points. A score less than 55 points disqualifies a contractor
from bidding on projects that are proposed by [Public Entity]. A score of between 56 and 72
indicates the Public Entity should conduct an interview of another contact, that is, a manager of
another completed project. A score-of 72 or higher on each of two interviews is sufficient for
pre-qualification.
First, please give a brief description of the project.
1. Are there any outstanding stop notices, liens, or claims by the contractor that are currently
unresolved on contracts for which notices of completion were recorded more than 120 days
ago? (1 point for each is deducted from overall score; maximum amount to be deducted is 5
points)
2. On a scale of 1-10, with 10 being the best, did the contractor provide adequate personnel?
(Max. 10 points)
3. On a scale of 1-10, with 10 being the best, did the contractor provide adequate supervision?
(Max. 10 points)
4. On a scale of 1-10, with 10 being the best, was there adequate equipment provided on the
job? (Max. 10 points)
5. On a scale of 1-10, with 10 being the best, was the contractor timely in providing reports
and other paperwork, including change order paperwork and scheduling updates? (Max. 10
points)
6. On a scale of 1-10, with 10 being the best, did the contractor adhere to the project schedule
that your [agency] [business] approved? (Max. 10 points)
7. Was the project completed on time? (10 points if the answer is "Yes").
Or, if the answer is "no," on a scale of 1-10 with 10 being the best, to what extent was
the contractor responsible for the delay in completion?
8. On a scale of 1-10, with 10 being the best, rate the contractor on the timely submission of
reasonable cost and time estimates to perform change order work. (Max. 10 points)
36
9. On a scale of 1-10, with 10 being the best, rate the contractor on how well the contractor
performed the work after a change order was issued, and how well the contractor
integrated the change order work into the existing work. (Max. 10 points).
10. On a scale of 1-10, with 10 being the best, rate how has the contractor been performing in
the area of turning in Operation & Maintenance manuals, completing as-built drawings,
providing required training and taking care of warranty items? (Max. 10 points)
11. On a scale of 1-10, with 10 being the best, rate the contractor on whether there were an
unusually high number of claims, given the nature of the project, or unusual difficulty in
resolving them. (Max. 10 points)
12. On a scale of 1-10, with 10 being the highest, rate the contractor with respect to timely
payments by the contractor to either subcontractors or suppliers. (If the person being
interviewed knows of no such difficulties, the score on this question should be "10.")
13. On a scale of 1-10, with 10 being the best, how would you rate the quality of the work
overall? (Max. 10 points)
37
Ya,-7z~,L 17? u L~L=
AGENCIES'?
INTERVIEW QUESTIONS
38
INSTRUCTIONS FOR PUBLIC AGENCIES
Re: Interview Questions
The following is meant to assist the public agency to conduct the interviews of the managers of
projects previously completed (that is, the people who supervised the projects for the project
owners by the contractor wishing to pre-qualify. The interview questions allow qualitative
review of work performance for contractors who choose to bid and pre-qualify for public works
contracts. The interview questions will be used to examine randomly selected contacts from at
least two completed past projects.
In each question, the person being- interviewed is asked to rate a certain aspect of contractor's
performance, using a scale of 1 to 10. The highest possible score is 120 points. A score of less
than 55 points disqualifies the contractor from bidding on projects that are proposed by the public
agency. A score of 72 points or more on each interview is sufficient for a contractor to qualify
on this portion of the prequalification process. If the scores resulting from an interview are
between 55 and 72, the public agency °should conduct another interview to collect additional
information.
It is possible that the score given to any interview answer may be challenged in an appeal.
For that reason, be sure to: (a) ask the person being interviewed for specific information or
details, to explain or substantiate the numerical answer given; and (b) take written notes of
the information provided.
Selection of the Interviewer:
(a) The public agency should select an individual who is at least moderately well informed
about public works construction.
(b) The individual should be unbiased during the interview; this is to ensure accurate
implementation of the interview questions.
(c) The individual should not use examples or deviate from the questions unless the project
manager is unclear and prompts further explanation. The interviewer should offer additional
explanation of the questions only if he/she is sure of the intent of the question in the
interview.
Locating the respondent to interview:
(a) The interviewer should attempt to contact a project manager of a past project for the
interview. The interviewer should be aware that for one interview to be completed, there
may be a need to interview multiple individuals. That is, the interviewer may have to
contact multiple individuals, such as the project manager concerning the building process,
and a financial manager for warranty items, assessed liens, and the like.
(b) Once reached, the interviewer should review the information contained in the questionnaire
of the past project with the project manager. That is, review who is being interviewed and
why (purposes of pre-qualifying for public works), the past project type, completion date,
and other pertinent information to ensure that the project manager is sure of the project
he/she is asked to review.
39
Interview Length:
(a) The interview should take 8-12 minutes, under normal circumstances.
(b) The interviewer, when contacting the project manager, should convey the expected time
which it takes to conduct the interview. This is to ensure the individual is not discouraged
from taking part in the interview
Conducting the interviews:
(a) The interview should examine at least two separate past projects listed in the questionnaire.
(b) After the interview is scored, the interviewer should compare the interview score with the
same contractor's score on the written questionnaire. If the ratings (overall scores) are far
apart, the interviewer should conduct at least one/two more interviews to determine how past
performance should be weighted.
(c) While conducting the interview, the interviewer should be consistent with the way the
questions are presented. That is, if the interviewer changes the way questions are presented
during the review, it could potentially change the way the respondent answers the questions
and jeopardize the overall scoring.
40
REQUEST FOR
PRE-QUALIFICATION (a7
FIDDERS COMMENCING
WITH FORTHCOMING
PUBLIC WoRK BID
41
REQUEST FOR PRE-QUALIFICATION OF BIDDERS COMMENCING
WITH FORTHCOMING PUBLIC WORK B
[Pre-qualification procedure begun at the same time as RFP1
Notice is hereby given that [Public Entity] has determined that all bidders on [Name of speck
project] to be undertaken by the [Public Entity] must be pre-qualified prior to submitting a bid on
that project. It is mandatory that all Contractors who intend to submit a bid, fully complete the pre-
qualification questionnaire, provide all materials requested herein, and be approved by [Public
Entity] to be on the final qualified Bidders list. No bid will be accepted from a Contractor that has
failed to comply with these requirements. If two or more business entities submit a bid as part of a
Joint Venture, or expect to submit'a bid as part of a Joint Venture, each entity within the Joint
Venture must be separately qualified to bid. The last date to submit a fully completed questionnaire
is mm/d!k . [35 days prior to the bid closing date]. Contractors are encouraged to submit pre-
qualification packages as soon as possible, so that they may be notified of omissions of information
to be remedied or of their pre-qualification status well in advance of the bid advertisement for this
project.
Answers to questions contained in the attached questionnaire, information about current bonding
capacity, notarized statement from surety, and the most recent reviewed or audited financial
statements, with accompanying notes and supplemental information, are required. [Public Entity]
will use these documents as the basis of rating Contractors in respect to the size and scope of
contracts upon which each Contractor is qualified to bid. [Public Entity] reserves the right to check
other sources available. [Public Entity's] decision will be based on objective evaluation criteria.
[Public Entity] reserves the right to adjust, increase, limit, suspend or rescind the pre-qualification
rating based on subsequently learned information. Contractors whose rating changes sufficient to
disqualify them will be notified, and given an opportunity for a hearing consistent with the hearing
procedures described below for appealing a pre-qualification rating.
While it is the intent of the pre-qualification questionnaire and documents required therewith to
assist [Public Entity] in determining bidder responsibility prior to bid and to aid [Public Entity] in
selecting the lowest responsible bidder, neither the fact of pre-qualification, nor any pre-
qualification rating, will preclude [Public Entity] from a post-bid consideration and determination of
whether a bidder has the quality, fitness, capacity and experience to satisfactorily perform the
proposed work, and has demonstrated the requisite trustworthiness.
The pre-qualification packages should be submitted under seal and marked "CONFIDENTIAL" to
[address].
The pre-qualification packages (questionnaire answers and financial statements) submitted by
Contractors are not public records and are not open to public inspection. All information provided
will be kept confidential to the extent permitted by law. However, the contents may be disclosed to
third parties for purpose of verification, or investigation of substantial allegations, or in the appeal
hearing. State law requires that the names of contractors applying for pre-qualification status shall
be public records subject to disclosure, and the first page of the questionnaire will be used for that
purpose.
42
Each questionnaire must be signed under penalty of perjury in the manner designated at the end of
the form, by an individual who has the legal authority to bind the Contractor on whose behalf that
person is signing. If any information provided by a Contractor becomes inaccurate, the Contractor
must immediately notify [Public Entity] and provide updated accurate information in writing, under
penalty of perjury.
[Public Entity] reserves the right to waive minor irregularities and omissions in the information
contained in the pre-qualification application submitted, to make all final determinations, and to
determine at any time that the pre-qualification procedures will not be applied to a specific future
public works project.
Contractors may submit pre-qualification packages during regular working hours on any day that
the offices of Public Entity are open. Contractors who submit a complete pre-qualification package
will be notified of their qualification status no later than ten business days after submission of the
information.
[Public Entity] may refuse to grant pre-qualification where the requested information and materials
are not provided, or not provided by mm/dd/yy [date specified in first paragraph - 35 days before
bid closing] There is no appeal from a refusal for an incomplete or late application, but re-
application for a later project is permitted. The closing time for bids will not be changed in order to
accommodate supplementation of incomplete submissions, or late submissions.
Where a timely and completed application results in a rating below that necessary to pre-qualify, an
appeal can be made. An appeal is begun by the Contractor delivering notice to [Public Entity] of its
appeal of the decision with respect to its pre-qualification rating, no later than ten business days
prior to the closing time for the receipt of bids for this public works project. Without a timely
appeal, the Contractor waives any and all rights to challenge the decision of [Public Entity], whether
by administrative process, judicial process or any other legal process or proceeding.
If the Contractor gives the required notice of appeal and requests a hearing, the hearing shall be
conducted so that it is concluded no later than five business days after Public Entity's receipt of the
notice of appeal, and no later than five business days prior to the last date for the receipt of bids on
the project. The hearing shall be an informal process conducted by a panel to whom the [governing
body of Public Entity] has delegated responsibility to hear such appeals (the "Appeals Panel"). At
or prior to the hearing, the Contractor will be advised of the basis for [Public Entity's] pre-
qualification determination. The Contractor will be given the opportunity to present information
and present reasons in opposition to the rating. Within one day after the conclusion of the hearing,
the Appeals Panel will render its decision. It is the intention of [Public Entity] that the date for the
submission and opening of bids will not be delayed or postponed to allow for completion of an
appeal process.
Note: A contractor may be found not pre-qualified for bidding on a specific public
works contract to be let by Public Entity, or on all contracts to be let by Public Entity
until the contractor meets Public Entity's requirements. In addition, a contractor may
be found not pre-qualified for either:
(1) Omission of requested information or
43
(2) Falsification of information
NOTICE: To contractors who are using subcontractors for this job, please be advised that
Public Entity may require, as to subcontractors, one of the following:
❑ The qualification of subcontractors in the following crafts or trades, following
acceptance of your bid, but before the award is made:
❑ Pre-qualification of all subcontractors.
❑ Pre-qualification of subcontractors in certain crafts.
❑ Post-bid qualification review.
44
1J.,NNOU1\1CEM21-~T71
T? ROCEDUR-Es AND OPEN
DATES FOR ANNUAL
Till
i~ RE-QUALIFICATION
45
ANNOUNCEMENT OF PRE-QUALIFICATION PROCEC S AND OPEN DATES
FOR ANNUAL PRE-QUALIFICATION
Notice is hereby given that on , 2000, the [Public Entity] determined
that all bidders on public works to be undertaken by the [Public Entity] must be pre-qualified prior
to submitting bids for public works. It is mandatory that' all Licensed Contractors who intend to
submit bids fully complete the pre-qualification questionnaire, provide all materials requested
herein, and be approved by [Public Entity] to be on the final Bidders list. No bid will be accepted
from a Contractor that has failed to comply with these requirements. If two or more business
entities submit a bid on a project as a Joint Venture, or expect to submit a bid as part of a Joint
Venture, each entity within the Joint Venture must be separately qualified to bid.
Pre-qualification applications may be submitted four times each year: (1) from January 1 through
January 10; (2) from April 1' through April 10; (3) from July 1 through July 10; and (4) from
October 1 through October 10. Contractors who submit a complete pre-qualification package will be
notified by first class mail of their qualification status, such notice to be mailed no later than fifteen
business days after submission of the information.
Answers to questions contained in the attached questionnaire, information about current bonding
capacity on an aggregate and per project limit, notarized statement from surety, and the most recent
reviewed or audited financial statements, with accompanying notes and supplemental information,
are required. [Public Entity] will use these documents as the basis of rating Contractors in respect to
the size and scope of contracts upon which each Contractor is qualified to bid. [Public Entity]
reserves the right to check other sources available. [Public Entity's] decision will be based on
objective evaluation criteria.
Pre-qualification approval will remain valid for one (1) calendar year from the date of notice of
qualification, except that [Public Entity] reserves the right during that calendar year to adjust,
increase, limit, suspend or rescind the pre-qualification ratings based on subsequently learned
information and after giving notice of the proposed action to the Contractor and an opportunity for a
hearing consistent with the hearing procedures described below for appealing a pre-qualification
determination.
While it is the intent of the pre-qualification questionnaire and documents required therewith to
assist [Public Entity] in determining bidder responsibility prior to the submission of bids and to aid
[Public Entity] in selecting the lowest responsible bidder, neither the fact of pre-qualification, nor
any pre-qualification rating, will preclude [Public Entity] from a post-bid consideration and
determination on a specific project of whether a bidder has the quality, fitness, capacity and
experience to satisfactorily perform the proposed work, and has demonstrated the requisite
trustworthiness. Contractors are encouraged to submit pre-qualification packages as soon as
possible, so that they may be notified of pre-qualification status well in advance of upcoming
projects.
The pre-qualification packages should be submitted under seal and marked "CONFIDENTIAL" to
[address].
46
The pre-qualification packages (questionnaire answers and financial statements) submitted by
Contractors are not public records and are not open to public inspection. All information provided
will be kept confidential to the extent permitted by law, although the contents may be disclosed to
third parties for the purpose of verification, investigation of substantial allegations, and in the
process of an appeal hearing. State law requires that the names of contractors applying for pre-
qualification status shall be public records subject to. disclosure, and the first page of the
questionnaire will be used for that purpose.
Each questionnaire must be signed under penalty of perjury in the manner designated at the end of
the form, by an individual who has the legal authority to bind the Contractor on whose behalf that
person is signing. If any information provided by a Contractor becomes inaccurate, the Contractor
must immediately notify [Public Entity] and provide updated accurate information in writing, under
penalty of perjury.
[Public Entity] reserves the right to waive minor irregularities and omissions in the information
contained in the pre-qualification application submitted, to make all final determinations, and to
determine at any time that the pre-qualification procedures will not be applied to a future public
works project.
A contractor who has submitted a completed application form, and who receives a rating of "not
qualified" from [Public Entity] may appeal that determination. There is no appeal from a finding
that a contractor is not pre-qualified because of a failure to submit required information, but re-
application during one of the designated time periods is permitted. A contractor may appeal
[Public Entity's] decision with respect to its request for pre-qualification, and request a hearing, by
giving notice to [Public Entity] no later than ten business days after receipt of notice of its
qualification status. Unless a Contractor files a timely appeal, the Contractor waives any and all
rights to challenge the qualification decision of [Public Entity], whether by administrative process,
judicial process or any other legal process or proceeding.
If the Contractor gives the required notice of appeal and requests a hearing, the hearing shall be
conducted so that it is concluded no later than ten business days after Public Entity's receipt of its
Notice of Appeal. The hearing so provided shall be an informal process conducted by a panel to
whom the [governing body of Public Entity] has delegated responsibility to hear such appeals (the
"Appeals Panel"). At or prior to the hearing, the Contractor will be advised of the basis for [Public
Entity's] pre-qualification determination. The Contractor will be given the opportunity to present
information and present reasons in opposition to the pre-qualification determination. At the
conclusion of the hearing or no later than one day after completion of the hearing, the Appeals Panel
will render its decision. The date for submission and opening of bids for a specific project will not
be delayed or postponed to allow for completion of an appeal process.
Note: A contractor may be found not pre-qualified for bidding on a specific public
works contract to be let by Public Agency, or on all contracts to be let by Public
Agency until the contractor meets Public Agency's requirements. In addition, a
contractor may be found not pre-qualified for either:
(1) Omission of requested information or
(2) Falsification of information
47
NOTICE: To contractors who are using subcontractors for this job, please be advised that
Public Entity may require, as to subcontractors, one of the following:
❑ The qualification of subcontractors in the following crafts or trades, following
acceptance of your bid, but before the award is made:
F-1 Pre-qualification of all subcontractors.
F_J Pre-qualification of subcontractors in certain crafts.
Q Post-bid qualification review.
48
'~ZURCEs Fc, ti 77ERl9iCA7:L a ;
CY INFORMATION GIVEN
BY CONTRACTORS
49
SOURCES FOR VERIFICATION OF INFORMATION
GIVEN BY CONTRACTORS
A CAUTIONARY NOTE: The information that will be given to public agencies by
contractors seeking pre-qualification is provided under oath, with the understanding that
the intentional providing of false information is, in itse,' grounds for disqualification. We
expect that the information given should be and will be accepted at face value. The
following information is provided for use in the few instances in which a public agency
reviewing the answers given in a questionnaire has specific reason to believe that one or
more answers should be verified by reference to publicly available information.
Information about a contractor's license(s)
(Questionnaire Part I, question 6, and Part , questions 6 and 9-13)
Names and addresses of licensed contractors, information about the type of license(s)
issued and the dates when licenses were issued (and certain other information), are
available from the Contractors' State Licensing Board (CSLB), 9821 Business Park
Drive, Sacramento, CA 95827. Telephone number 800-321-2752. The CSLB web site
for public information is: www.CSLB.ca.gov.
Information about workers' compensation insurance
(Part I, question 3 and Part H, questions 32-33)
Every workers' compensation insurance carrier issues to each of its insured businesses a
Certificate of Insurance. The contractor should be willing to provide a copy upon request.
Each contractor's Experience Modification Rate for the year should be stated in a letter to
the contractor from the contractor's workers' compensation insurance carrier.
Some large companies are legally self-insured for workers' compensation, with the consent
and authorization of the Department of Industrial Relations. The names of companies that
are legally self-insured are available from the Department's Office of Self-Insurance Plans,
Workers' Compensation, 2265 Watt Avenue, Suite 1, Sacramento, CA 95825; (916) 483-
3392.
The names of each business's current and recent workers' compensation insurance carriers are
available from the Workers' Compensation Insurance Reporting Bureau (WCIRB), 575 Market
Street, San Francisco, telephone (415) 777-0777. WCIRB is not a public agency but it
provides information to the public. It will provide the names of the current and recent workers'
compensation insurance carriers of every employer in California, in response to a written
request, for a fee of $8 for every year for which you seek information.
50
Information about whether surety insurance carriers
are "admitted" to do business in California
(Part I, question 5)
The California Department of Insurance will verify whether an insurance carrier is
"admitted" to issue insurance policies within the State. The Department has a "Hot-Line"
number - 800-927-4357, and a web-site from which the information is available:
www.insurance.ca.gov
Information on disqualification from bidding on public contracts
(Part I, question 8 and Part H, question 15)
Information on the identities of contractors that have been disqualified from bidding on
public works contracts is available from the California Labor Commissioner, Division of
Labor Standards Enforcement, 455 Golden Gate Avenue, San Francisco, telephone (415)
703-4810.
Information available from the Secretary of State about corporations
(fart , questions la-ld, 24)
The California Secretary of State has certain current and historical information about all
corporations that operate in California: dates of incorporation, articles of incorporation, the
name of the original incorporators, the names of the corporate officers (who are not
necessarily the corporate stockholders) and an agent for service of process for the
corporation. This information is available from the Secretary of State upon written request.
(Secretary of State, Business Programs Division, 1500 Eleventh Street, Sacramento, CA
95814. Telephone (916) 653-2121 or 653-1239). The Secretary of State does not ordinarily
have a listing of the names of initial stockholders or current stockholders, and that
information is generally not available in any public record.
Information available from County Clerks about
partnerships and sole proprietorships
(Part I, questions la-ld,24)
Every business, including a partnership, that operates under a "fictitious name" (for
example, "Ajax Sheet Metal Contractors" or "Smith Brothers Electrical Contractors") is
required to file with the County Clerk in the county in which its home office is located a
"Fictitious Business Name" statement. This statement will indicate the owner of the
business, if the business is a sole proprietorship, and the names of partners, if the business is
a partnership. The information is available to the public from the County Clerk upon
request. A written request may be necessary.
51
Information about bankruptcy proceedings
(Part II, questions 7 and 8)
Bankruptcy petitions, which include the names of the person or business that is seeking
protection from the Bankruptcy Court, are available for public inspection at the office of
the Clerk of each Bankruptcy Court (which are federal courts). In California, Bankruptcy
Courts are located in Sacramento, Modesto, Fresno, San Francisco, Oakland, San Jose,
Los Angeles, Santa Ana, Riverside, and San Diego. Most documents filed in court in
bankruptcy proceedings are available for public inspection, at the Bankruptcy Court
clerk's . office. Some information on bankruptcy filings may also be available from
commercial enterprises that collect and sell information from public records). In
addition some information about bankruptcy cases filed August 1990 and later is
available on-line through the "PACER" QPublic Access to Court Electronic Records)
system. To obtain information from PACER, you must register with the system, and pay
a fee for the materials obtained. Call 1-800-676-6856 or you may register online at
http://pacer.psc.uscourts.gov/.
Information about civil suits and arbitration cases
(Part II, questions 14,17 and 18)
Each court keeps records of every civil suit filed in that court, and of the judgments that are
issued after trials. However, the exact terms of pre-trial settlements are generally not
recorded in court files. Documents related to disputes submitted to arbitration are generally
not available for public inspection. Public agencies, however, are required to disclose the
terms of such settlements, when documents are requested under the California Public
Records Act.
Information about criminal convictions
(Part I, question 9, and Part H, questions 21, 22, and 23)
Criminal convictions are a matter of public record. Each courthouse (in both the federal and
state court systems) has an index of its own criminal records. In addition, a few data
collection businesses have collected criminal conviction information from public records
throughout the state, and the collected information about particular individuals or businesses
is available for sale from these private businesses.
Information about Federal court civil and criminal cases
(Part I, question 9)
Information about federal criminal cases (filed August 1991 and later) and civil cases
(filed August 1990 and later) is available on-line through the "PACER' WPublic Access to
Court Electronic Records) system. To obtain information from PACER, you must
register with the system, and pay a fee for the materials obtained. Call 1-800-676-6856)
or you may register online at http://pacer.psc.uscourts.gov/.
52
Information about citations issued for violation of
industrial safety and health laws
(Part , questions 28 and 29)
Information about citations issued by both the federal Occupational Safety and Health
Administration and the California Division of Occupational Safety and Health (Cal OSHA)
are available on a web-site maintained by federal OSHA, http://www.osha.gov. At that
web site, click on "Library." On the Library page, click on "Statistics and Inspection Data."
Next, click on "Establishment Search." When the next screen appears, enter the name of the
contractor about whom you seek information in the "Establishment" window. In the
"Process" window, enter the number 999999. Click on California in the "State" window. In
the "Inspection Date" window, enter "1990." Then click the submit button.
Information about prevailing wage law violations
(Part H, question 34)
Information about recent prevailing wage law violations is available from the
Division of Labor Standards Enforcement, at 2424 Arden Way, Suite 360, Sacramento, CA
95825. A model letter asking for such information is enclosed.
Citations from either Air Quality or Water Quality Board
for violations of regulations
(Part , question 30)
Information about citations issued by the California Air Resources Board is
available from that agency under the Public Records Act. Their address is 2020 L Street,
Sacramento, CA 95814, or Post Office Box 2815, Sacramento, 95812. In addition,
Regional Air Quality Management Districts and Regional Water Quality Control Boards
throughout the state may issue citations for violation of air quality or water quality
standards. Consult the appropriate board in your area for information about how to gather
appropriate information.
Information about state-approved apprenticeship plans
and violations of state apprenticeship laws
(Part , questions 36-38)
Information about violations of state apprenticeship laws can be obtained from the
Division of Apprenticeship Standards, 455 Golden Gate Avenue, 8t' Floor, Post Office Box
420603, San Francisco, CA 94142.
53
CA Codes (pcc:20100-20103.6)
PUBLIC CONTRACT CODE
SECTION 20100-20103.6
20100. This chapter may be cited as the Local Agency Public
Construction Act.
20101. (a) Except as provided in Section 20111.5, a public entity
subject to this part may require that each prospective bidder for a
contract complete and submit to the entity a standardized
questionnaire and financial statement in a form specified by the
entity, including a complete statement of the prospective bidder's
experience in performing public works. The standardized questionnaire
may not require prospective bidders to disclose any violations of
Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of
the Labor Code committed prior to January 1, 1998, if a violation was
based on a subcontractor's failure to comply with these provisions
and the bidder had no knowledge of the subcontractor's violations.
The Department of Industrial Relations, in collaboration with
affected agencies and interested parties, shall develop model
guidelines for rating bidders, and draft the standardized
questionnaire, that may be used by public entities for the purposes
of this part. The Department of Industrial Relations, in developing
the standardized questionnaire, shall consult with affected public
agencies, cities and counties, the construction industry, the surety
industry, and other interested parties. The questionnaire and
financial statement shall be verified under oath by the bidder in the
manner in which civil pleadings in civil actions are verified. The
questionnaires and financial statements shall not be public records
and shall not be open to public inspection; however, records of the
names of contractors applying for prequalification status shall be
public records subject to disclosure under Chapter 3.5 (commencing
with Section 6250) of Division 7 of Title 1 of the Government Code.
(b) Any public entity requiring prospective bidders to complete
and submit questionnaires and financial statements, as, described in
subdivision (a), shall adopt and apply a uniform system of rating
bidders on the basis of the completed questionnaires and financial
statements, in order to determine both the minimum requirements
permitted for qualification to bid, and the type and size of the
contracts upon which each bidder shall be deemed qualified to bid.
The uniform system of rating prospective bidders shall be based on
objective criteria.
(c) A public entity may establish a process for prequalifying
prospective bidders pursuant to this section on a quarterly basis and
a prequalification pursuant to this process shall be valid for one
calendar year following the date of initial prequalification.
(d) Any public entity requiring prospective bidders on a public
works project to prequalify pursuant to this section shall establish
a process that will allow prospective bidders to dispute their
proposed prequalification rating prior to the closing time for
receipt of bids. The appeal process shall include the following:
(1) Upon request of the prospective bidder, the public entity
shall provide notification to the prospective bidder in writing of
the basis for the prospective bidder's disqualification and any
supporting evidence that has been received from others or adduced as
a result of an investigation by the public entity.
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CA Codes (pcc:20100-20103.6) Page 2 of 3
(2) The prospective bidder shall be given the opportunity to rebut
any evidence used as a basis for disqualification and to present
evidence to the public entity as to why the prospective bidder should
be found qualified.
(3) If the prospective bidder chooses not to avail itself of this
process, the proposed prequalification rating may be adopted without
further proceedings.
(e) For the purposes of subdivision (a), a financial statement
shall not be required from a contractor who has qualified as a Small
Business Administration entity pursuant to paragraph (1) of
subdivision (d) of Section 14837 of the Government Code, when the bid
is no more than 25 percent of the qualifying amount provided in
paragraph (1) of subdivision (d) of Section 14837 of the Government
Code.
(f) Nothing in this section shall preclude an awarding agency from
prequalifying or disqualifying a subcontractor. The disqualification
of a subcontractor by an awarding agency does not disqualify an
otherwise prequalified contractor.
20102. Notwithstanding any other provision of this part to the
contrary, where plans and specifications have been prepared by a
public agency, whose activities are subject to this part, in order
for a public project to be put out for formal or informal bid, and,
subsequently, the public agency elects to perform the work by day's
labor, the public agency shall perform the work in strict accordance
with these same plans and specifications.
Revisions of the plans and specifications may be made once a
justification detailing the specific reasons for the change or
changes has been approved by the public agency or its project
director and a copy of the change and its justification is placed in
the project file.
20103.5. In all contracts subject to this part where federal funds
are involved, no bid submitted shall be invalidated by the failure of
the bidder to be licensed in accordance with the laws of this state.
However, at the time the contract is awarded, the contractor shall
be properly licensed in accordance with the laws of this state. The
first payment for work or material under any contract shall not be
made unless and until the Registrar of Contractors verifies to the
agency that the records of the Contractors'' State License Board
indicate that the contractor was properly licensed at the time the
contract was awarded. Any bidder or contractor not so licensed shall
be subject to all legal penalties imposed by law, including, but not
limited to, any appropriate disciplinary action by the Contractors'
State License Board. The agency shall include a statement to that
effect in the standard form of prequalification questionnaire and
financial statement. Failure of the bidder to obtain proper and
adequate licensing for an award of a contract shall constitute a
failure to execute the contract and shall result in the forfeiture of
the security of the bidder.
20103.6. (a) (1) Any local agency subject to this chapter shall, in
the procurement of architectural design services requiring an
expenditure in excess of ten thousand dollars ($10,000), include in
any request for proposals for those services or invitations to bid
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CA Codes (pcc:20100-20103.6)
from a prequalified list for a specific project a disclosure of any
contract provision that would require the contracting architect to
indemnify and hold harmless the local agency against any and all
liability, whether or not caused by the activity of the contracting
architect.
(2) The disclosure statement shall be prominently set forth in
bold type.
(b) In the event a local agency fails to comply with paragraph (1)
of subdivision (a), that local agency shall (1) be precluded from
requiring the selected architect to agree to any contract provision
requiring the selected architect to indemnify or hold harmless the
local agency against any and all liability not caused by the activity
of the selected architect, (2) cease discussions with the selected
architect and reopen the request for proposals or invitations to bid
from a qualification list, or (3) mutually agree to'an indemnity
clause acceptable to both parties.
(c) This section shall become operative on July 1, 1998.
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10a
June 2, 2010
SUBJECT: DISCUSSION AND POSSIBLE DIRECTION TO STAFF REGARDING MOBILEHOME
RENT STABILIZATION ORDINANCE
Background: At its meeting on May 5, 2010, the City Council instructed the City Manager to
provide estimates of the costs to adopt and implement a mobilehome park rent stabilization
program for the City. The City Attorney was instructed to review ordinances from other
jurisdictions, including the Santa Rosa ordinance, and provide a range of options with enough
detail so that the City Manager could estimate the cost of the different options and the City Council
could decide which, if any, of the options it would want to adopt. This information is to be reported
to the City Council during its consideration of the City budget for the 2010-11 fiscal year.
The City Attorney has identified three ordinances which provide different approaches to
mobilehome rent stabilization or control: (1) the Santa Rosa ordinance (attachment 1); (2) the
proposed ordinance and model mobilehome rental agreement, considered, but not adopted, in
Lake County (attachment 2); and (3) the City of Merced ordinance (attachment 3).
In this ASR, the three ordinances are described in enough detail to assist the City Manager in her
cost estimates.
Discussion: The attached ordinances represent three distinct approaches to mobilehome rental
control and appear somewhat typical of the approaches taken statewide to mobilehome rent
control.
1. The Santa Rosa Ordinance.
a. Summary of ordinance. This ordinance establishes a base rent for mobilehome parks
and controls. the allowable increases in the base rent. In Santa Rosa the base rent is the rent that
was charged in each park as of September 1, 1993. In Ukiah that would probably be the date,
when the ordinance is introduced, adopted or becomes effective.
Recommended Action(s): Discuss Options for an Ordinance and Provide Direction to Staff as to
Further Steps, as Appropriate.
Alternative Council Option(s):
Citizens advised: n/a
Requested by: City Council
Prepared by: David J. Rapport, City Attorney
Coordinated with: Jane Chambers, City Manager
Attachments: 1- Santa Rosa Ordinance
2- Lake County Draft Ordinance and Draft Lease Supplement
3-Merced Ordinance
4- UC Berkeley article on effects of Mobilehome Rent Control
5- History, pf rerlt control in Escondido
Approved: _ _
Ja Chambers, City Manager
ASR - Rent Control Page 2
The ordinance allows a mobilehome park to increase the rent each year by 100 percent of the
consumer price index for the most recent 12-month period ending in August. The 12-month period
in Ukiah would depend on the date when the base rent is fixed.
The ordinance caps the CPI increase at 6%, but if the the CPI increases by more than 6% for two
consecutive years, the Mobilehome Rent Control Clerk (Clerk)' is directed to review the maximum
rent increase and recommend an amendment to the ordinance adjusting the cap, "if appropriate."
The Ordinance also allows a mobilehome park owner to pass-through to the mobilehome space
tenant the following cost increases: (1) government mandated expenses, such as, but not limited
to, government mandated capital expenditures, and increases in fees and taxes (except the
annual 2% increase in property taxes); (2) utility charges (although water, gas and electric utilities
that are not separately metered must be included as additional rent rather than passed-through as
a separate charge); (3) capital improvements, including design and financing costs; and (4) capital
replacement costs, including design and financing costs. Capital improvements are improvements
that are amortized and depreciated under the Internal Revenue Code. Capital replacements are
capital expenditures as defined in the IRC. Maintenance expenses cannot be passed through. The
ordinance gives, as an example, an asphalt overlay, which is a capital replacement, and a slurry
seal which is not.
All of the pass-throughs must be listed as charges which are separate from base rent and the park
owner must disclose how the pass-through was calculated within a reasonable time upon request
of a tenant.
The ordinance specifies different procedures for imposing or protesting the different pass-
throughs. The park owner can immediately pass-through the government mandated expense, but
the tenants of 50 percent of the spaces or 50 spaces, whichever is less, can file a petition with the
Clerk protesting the pass-through within 30 days after the park owner gives notice of the increase.
The protest is heard by an Arbitrator who can reduce or disallow the increase based on criteria set
forth in the ordinance.
Ninety days before a park owner can pass-through capital improvements or replacements, he or
she must give to each affected tenant and file with the Clerk a notice of the dollar amount of the
increase, the percentage of the increase, how the increase was calculated, the spaces affected,
the effective date, and that any tenant may request from the Clerk a petition for review of the
proposed increase. The ordinance contains a detailed arbitration procedure for conducting this
review.
The ordinance also allows a park owner to seek a "fair return" rent increase, if he can show that
the CPI increase does not provide a fair return on the park owner's investment, using a method
which is spelled out in the ordinance. He must make that showing through the arbitration
procedure.
The arbitration procedure is formal to insure due process. The ordinance specifies a meet and
confer process to resolve petitions and protests and failing that the formal arbitration procedure.
1 In Santa Rosa, this is the Director of Planning and Redevelopment or his or her designee. In Ukiah, it could be an existing City
official (e.g., City Manager, Director of Planning and Community Development, etc.) who could delegate the duties to another
City employee or contractor.
ASR - Rent Control Page 3
Under the arbitration rules in the ordinance, the Clerk gives written notice to the applicant or
petitioner and the park owner when an application or petition is referred for arbitration. The Clerk
maintains a list of qualified arbitrators. The Clerk presents the parties a list of three. Each party
can challenge one. The remaining arbitrator conducts the arbitration. The Clerk sets the date for
the arbitration and gives the parties notice of the time, date and place. The Clerk provides the
clerical services in support of the arbitration and is empowered to issue subpoenas upon the
request of a party who wants to compel the attendance of witnesses at the arbitration hearing or
the production of documents and other evidence.
When the arbitrator renders his or her decision, after conducting the hearing in accordance with
the rules in the ordinance, he or she also submits a bill for his or her services to the Clerk who
pays the bill from the ordinance administrative fund. The arbitrator may impose the fee on either
party to the arbitration, if he or she finds that the party's position in the arbitration was frivolous.
Significantly, the ordinance does prohibit rent increases, when a mobilehome is sold in place. This
is the practice challenged in Guggenheim v. City of Goleta, the case which is currently pending in
the Ninth Circuit federal court of appeal. The economic impact of this and other features of
mobilehome rent control ordinances are also discussed in the attached economic analysis,
entitled, "The Curious Institution of Mobile Home Rent Control: An Analysis of Mobile Home Parks
in California" (2006), by Carl Mason and John M. Quigley, University of California, Berkeley,
published in Working Papers, Berkeley Program on Housing and Urban Policy, Institute of
Business and Economic Research, UC Berkeley. (Attachment 4.) Also attached for the City
Council's consideration is a history of mobilehome rent control in the City of Escondido prepared
by the City, which provides some useful insight into the effects of mobilehome rent control.
(Attachment 5.)
A park owner is required to provide a written disclosure to any person proposing to purchase a
mobilehome in place stating the current and proposed base rent, a copy of the ordinance, and
advise the tenant that he or she is exempt from rent control if he or she signs a lease with a term
of more than one year as required by Cal. Civil Code §798.17. The form of the notice must be
approved by the Clerk. The park owner must retain a copy of the disclosure signed by the
prospective mobilehome owner which the Clerk may inspect upon request.
If a mobilehome park charges rent in excess of the amount allowed under the ordinance, the
tenant can refuse to pay the excess and assert the ordinance violation as a defense in a legal
action filed by the landlord to collect the excess rent.
The costs of administering the ordinance are paid by an annual fee established by City Council
resolution, which is charged against the total number of of mobilehome spaces in the City which
are subject to. rent control. The park owner is liable for the fee based on the number of spaces in
his or her park and may pass through to his or her tenants 50% of the fee. The fee is due on a
date established by the City Council but may be paid in quarterly installments by the park owners.
b. Administrative costs.
The costs to administer the ordinance include the costs of a Clerk to perform all of the functions
assigned to the Clerk under the ordinance, including assessing and collecting ordinance
administration fees, accounting for ordinance administrative funds, proposing fees for City Council
approval and preparing resolutions adopting the fees, processing petitions protesting government
mandate, capital improvement and capital replacement pass throughs, processing fair return
ASR - Rent Control Page 4
applications by park owners, accepting, recording and maintaining documents required to be filed
with the Clerk, performing the Clerk's duties in conducting arbitrations, including developing and
maintaining a list of qualified arbitrators, giving notices to parties, proposing arbitrators to the
parties, reviewing and determining whether applications or petitions are complete or contain the
requisite number of bona fide signatures, developing and maintaining the administrative record in
all arbitrations, developing forms required by the ordinance such as petition, notice and disclosure
forms, maintaining a list of affected mobilehome park owners, providing copies of documents upon
request, and assisting in the enforcement of the ordinance.
Direct and indirect overhead to cover clerical time to assist the Clerk, office equipment, space
cost, supplies, similar costs.
City Attorney legal fees to advise the Clerk.
The costs of each arbitrator who must be a licensed attorney or CPA who has completed a formal
course of training on arbitration; a membership in the American Arbitration Association with
expertise in rental dispute arbitration; or service as a California judge. The hourly rates for
arbitrators with these qualifications could range from $250-$5001 hour.
Some allowance should be included for litigation expenses and attorneys fees to defend
challenges to the ordinance or to an arbitrator's decision. All of the decisions by arbitrators in
arbitrations conducted under the ordinance will be subject to judicial review. (See, e.g., the article
from the May 19 Press Democrat concerning the recent settlement of two law suits challenging
abitration decisions under the Petaluma mobilehome rent control ordinance. Attachment 5.) The
City Attorney recommends budgeting a significant amount initially for litigation expenses, because
a "facial" challenge to a rent control ordinance, like the one in the Goleta case, must be filed within
a two year statute of limitations which begins to run from the date the ordinance is adopted.
Therefore, if a challenge to the ordinance itself is going to be filed, it will most likely be filed within
the first two years after the ordinance is adopted.
2. Lake County draft ordinance.
a. Summary of ordinance.
The Lake County ordinance (attachment 2) is similar to the Santa Rosa ordinance in that it
establishes a base rent and then controls increases based on CPI increases and pass-throughs.
The primary differences are that the Lake County draft ordinance uses a Hearing Board rather
than a professional arbitrator. It calls the Clerk an Administrator, but the duties of the Administrator
are similar.
The unique feature of the Lake County draft ordinance is that it offers mobilehome park owners
the option of exempting the entire park from the rent control ordinance, if the park owner simply
offers its tenants a five year lease in a form approved by the Board of Supervisors under the
ordinance or an equivalent lease with the same or better protections as determined by the
Administrator. The draft lease supplement is part of Attachment 2. The park is exempt whether
any tenant agrees to enter the lease supplement or not. Once the park is exempt, the rent control
features of the lease are enforced as contractual obligations of the parties to the agreement. The
City is not involved. The administrative and enforcement costs are imposed on and under the
control of the parties to the lease.
ASR - Rent Control Page 5
This feature of the ordinance is different than the exemption from rent control in Civil Code Section
798.17. That statute exempts any lease between a park owner and a tenant with a term greater
than 12 months from any otherwise applicable rent control ordinance. This statutory exemption in
the mobilehome park residency law only applies to specific leases that are actually entered by the
park owner and individual tenants. Unless longer term leases are actually entered by every tenant
in a mobilehome park, the statute, unlike the ordinance, would not exempt an entire park from the
rent control ordinance.
b. Administrative costs.
The City would continue to incur the administrative costs of the ordinance as to any mobilehome
parks that did not offer the lease to their tenants. In addition, the Administrator would have to
review and approve any lease supplements proposed by a mobilehome park owner as an equal or
better option to the standard form lease supplement.
The other costs would be similar to the costs of administering the Santa Rosa ordinance, but
would be imposed on a smaller number of spaces, if any of the parks offered the form lease to
their tenants, because the fee only applies to spaces which are not exempt from the ordinance.
3. Merced ordinance.
a. Summary of ordinance.
The Merced ordinance (attachment 3) does not establish a base rent and regulate increases to the
base rent. The ordinance is called the Mobile Home Rent Review Ordinance. It establishes a Rent
Review Commission, consisting of seven (7) members appointed by the City Council: two park
tenants, two park owners, three city residents who have no connection or financial interest in
mobilehome parks.
The Commission conducts investigations and hearings upon petitions from mobilehome park
tenants objecting to a rent increase within the past six months. The petition must be signed by
tenants representing 51 % or more of the physically occupied spaces in mobilehome parks with 25
or more spaces. The Commission is empowered to order a reduction in any proposed rent
increase that it determines is so great as to be unconscionable or an unreasonable increase.
Pursuant to findings of an unconscionable or unreasonable rent increase, the Commission can
require the mobile home park owner, operator or manager to: (1) Reduce the rental charge to a
rate to be determined by the Commission; (2) Continue the rental charge as it existed under the
former lease or rental agreement, written or implied; or (3) Increase the rental charge to a rate set
by the commission or to the rate requested by the park owner.
Any rental increases which have been collected by a mobilehome park owner pursuant to an
increase which is later determined by the Commission to have been excessive shall be returned to
the tenants with sixty (60) days after such determination.
In evaluating the rent increase, the Commission shall consider the increased operating costs to
the owner attributable to, and including but not limited to, increases in utility rates and property
taxes, insurance, advertising, governmental assessments, capital improvements, incidental
services, normal repair and maintenance, minor upgrading of amenities and services, or the
deletion of amenities or services, plus a fair rate of return on investment.
ASR - Rent Control Page 6
The ordinance contains sanctions for park owners who threaten or take punitive action against
tenants who sign petitions. The Commission decisions are final for the City. There is no appeal to
the City Council.
The ordinance covers administrative costs by charging a fee to petitioners and park owners who
participate in a hearing before the Commission. The fee is set in the ordinance at $300 for the
petitioner and $300 for the park owner.
b. Administrative costs.
There are relatively few on-going administrative costs. Most of the costs are incurred in connection
with the filing of a petition and conducting a hearing and defending a decision if there is a legal
challenge.
There would have to be a City employee or Commission clerk who administers the process of
advertising for Commission appointments, provides meeting space and support services to the
Commission in conducting hearings, adopting regulations and making semi-annual reports to the
City Council. The employee would have to certify the signatures on petitions, provide notice of
hearings to parties and commissioners, maintain Commission records, keep and prepare
administrative records of commission hearings and collect and account for hearing fees.
There would have to be some legal advice to the Commission Clerk and the Commission.
There would be legal expenses in defending a Commission decision.
The fees charged to the parties to a hearing would have to exceed $300 to cover these expenses
7 Budgeted FY 09110 F-I New Appropriation ❑ Not Applicable 7 Budget Amendment Required
Amount Budgeted Source of Funds (title and Account Number Addtl. Appropriation Requested
A`lTACHMEw
Chapter 6-66 RENT CONTROL-MOBILEHOMES
Note:
* Prior ordinance history: 3072, 3213, 3219, 3243, 3255, 3281, 3360, 3376, 3469, 3480,
3491, 3540.
6-66.010 Findings and purpose.
(A) The State of California has recognized, by the adoption of special legislation
regulating tenancies of mobilehome owners in mobilehome parks, that there is a
significant distinction between homeowners in mobilehome parks and other dwelling
units, and the State likewise has recognized that homeowners in mobilehome parks,
unlike apartment tenants or residents of other rental stock, are in the unique position of
having made a substantial investment in a residence, the space for which is rented or
leased as distinguished from owned.
The physical removal and relocation of a mobilehome from a rented or leased space
within a mobilehome park can be accomplished only at substantial cost and
inconvenience with a limited concurrent ability to find another location and, in many
instances, the removal requires a separation of the mobilehome unit from appurtenances
which have been made permanent, thus creating severe damage and depreciation in value
to the mobilehome.
As a result of the absence of vacant spaces that are not new, it is virtually impossible
for mobilehome owners to move their mobilehomes from one park to another within the
city.
(B) There is presently within the City and the surrounding areas a shortage of sites
for the placement of mobilehomes.
(C) Mobilehomes presently constitute an important source of housing for persons of
low and moderate income, who as a group are unable to afford unreasonably large rent
increases.
(D) A large number of persons living in mobilehomes are elderly, some of whom live
on small fixed incomes. These persons may expend a substantial portion of their income
on rent and may not be able to afford other housing within the City.
(E) There is an extremely low vacancy rate in mobilehome parks within the City,
with no sites presently available in some or all of the mobilehome parks. This condition
enables owners to impose unreasonably large rent increases.
(F) Rents for sites within mobilehome parks have, prior to the adoption of rent
control, increased substantially within the City and other areas of the State. In some
mobilehome parks, rent increases in the five years prior to 1993 were substantially in
excess of the increases in the Consumer Price Index.
(G) Mobilehome owners residing in mobilehome parks have very limited mobility
because it is difficult and costly to move mobilehomes; such mobilehome owners may be
forced to accept and pay unreasonably increased rents.
(H) Studies and hearings have shown that there is presently, within the City and
surrounding areas, a shortage of spaces for the location of mobilehomes, resulting in an
extremely low vacancy rate. Space rent increases at the time of sale or other transfer of a
mobilehome within a park have been shown to be substantially over the pre-transfer rent.
Such large rent increases at the time of sale of a mobilehome may unfairly depress the
sales price of the mobilehome and work an economic hardship on the mobilehome owner.
The annual rent increases and vacancy control provisions of this chapter prevent this
economic hardship while protecting the property rights of owners.
(I) Rapidly rising and large incremental increases in space rent prior to rent control
resulted in an atypical market depression in the resale value of mobilehomes within the
city.
(J) Because of the space shortage and potential for rapidly rising rents, regulation is
necessary to assure that economic hardship to a substantial number of mobilehome
owners in the City, many of whom are senior citizens on low fixed incomes, does not
occur.
(K) It is the purpose of this chapter to establish a speedy and efficient method of
reviewing certain requested mobilehome space rent increases in mobilehome parks to
protect mobilehome owners from arbitrary, capricious or unreasonable site rent
adjustments while insuring owners and/or operators and investors a fair and reasonable
return. It is not the purpose of this chapter to preserve affordable housing, but rather to
allow reasonable annual rent increases which protect mobilehome owners while
providing a fair return to owners. (Ord. 3648 § 1 (part), 2004)
6-66.020 Definitions.
For the purpose of this chapter, the following words, terms and phrases shall be
defined as follows:
(A) "Affected mobilehome owners" means those mobilehome owners whose space is
not covered by a valid lease meeting the requirements of section 798.17(b) of the
California Civil Code or otherwise legally exempt from local rent control regulation.
(B) "Arbitrator" means a person who is neither a mobilehome owner nor has an
interest in a mobilehome park of a nature that would require disqualification under the
provisions of the Political Reform Act if the person were a designated City employee, has
experience in analysis of financial records, and meets one of the following criteria:
(1) Licensed attorney or CPA who has completed a formal course of training on
arbitration;
(2) Membership in the American Arbitration Association with expertise in rental
dispute arbitration; or
(3) Service as a California judge.
(C) "Capital improvement" means those improvements which directly and primarily
benefit and serve the existing mobilehome owners by materially adding to the value of
the park or adapting it to new uses, and which are required to be amortized over the
useful life of the improvements pursuant to the provision of the Internal Revenue Code.
"Capital improvement costs" means all costs reasonably and necessarily related to the
planning, engineering and construction of capital improvements and shall include debt
service costs, if any, incurred as a direct result of the capital improvement. Capital
improvement does not include ordinary maintenance or repairs.
(D) "Capital replacement" means a capital expenditure as defined by the Internal
Revenue Code which replaces an existing improvement. For example, an asphalt overlay
of an existing roadway or parking lot is a capital replacement, a slurry seal of an existing
roadway or parking lot is not.
(E) "City" means the City of Santa Rosa, California.
(F) "Clerk" means Clerk of the Santa Rosa Mobilehome Rent Control Program, who
shall be the Director of Housing and Redevelopment or his/her designee.
(G) "Consumer Price Index" or "CPI" means the Consumer Price Index for all urban
consumers in the San Francisco/Oakland/San Jose area published by the Bureau of Labor
Statistics.
(H) "Department" means the Department of Housing and Redevelopment of the City
of Santa Rosa.
(I) "MRL" means the California Mobilehome Residency Law.
(J) "Mobilehome" means a structure, designed for human habitation and for being
moved on a street or highway under permit pursuant to California Vehicle Code section
35790, including a trailer or recreational vehicle, as defined in California Civil Code
section 798.3 as it may be amended from time to time. -[Why include trailers or
recreational vehicles?]
(K) "Mobilehome park" or "park" means any area of land within the City of Santa
Rosa where two or more mobilehome spaces are rented, or held out for rent, to
accommodate mobilehomes used for human habitation. [No minimum rent specified.
Could this include a park where spaces are rented by the day to recreational vehicles?]
(L) "Mobilehome space" means the site within a mobilehome park intended,
designed or used for the location or accommodation of a mobilehome and any accessory
structures or appurtenances attached thereto or used in conjunction therewith.
(M) "Mobilehome owner" means a person who is the owner of a mobilehome and
legally occupies the mobilehome within a mobilehome park.
(N) "Owner" means the owner or operator of a mobilehome park or an agent or
representative authorized to act on said owner's or operator's behalf in connection with
the maintenance or operation of such park.
(O) "Party" as used in this chapter refers to any affected mobilehome owner and/or
owner involved in proceedings under this chapter.
(P) "Prospective mobilehome owner" means a person who is in the process of
negotiating a tenancy in a mobilehome park.
(Q) "Rent" means the consideration paid for the use or occupancy of a mobilehome
space.
(R) "Rent stabilization administration fee" means the fee established from time to
time by resolution of the City Council in accordance with the provisions of the ordinance.
(S) "Rent increase" means any increase in base rent charged by an owner to a
mobilehome owner or offered to a prospective mobilehome owner. (Ord. 3648 § 1 (part),
2004)
6-66.030 Base rent.
Except as provided in this chapter, an owner shall not demand, accept or retain rent for
a mobilehome space exceeding the base rent which shall be the rent in effect for that
space on September 1, 1993. If a previously rented mobilehome space was not rented on
September 1, 1993, the base rent shall not exceed the rent in effect during the last month
the space was rented prior to September 1, 1993, except as provided in this chapter. For a
mobilehome space first rented after September 1, 1993, the owner shall establish the base
rent. For parks annexed into the City after September 17, 1993, the base rent shall be the
rent charged on the date of a park's annexation into the City. (Ord. 3648 § 1 (part), 2004)
6-66.040 Consumer Price Index, utilities and other pass throughs.
(A) Consumer Price Index. An owner, once in any 12-month period, may impose a
rent increase for a mobilehome space by 100 percent of the percentage increase, if any, in
the Consumer Price Index (CPI) during the most recent 12-month period ending in
August; provided, however, the rental increase shall not exceed six percent of the
previous rent charged for the space. If an owner has obtained a rent increase under
subsection 6-66.050(B), the owner may calculate the rent increase allowed by this
subsection based upon the approved comparable rent as allowed in subsection 6-
66.050(B) instead of upon the actual rent in effect at the time of the increase.
(B) If the change in the CPI exceeds six percent for two consecutive years, the Clerk
shall review the maximum rent increase and recommend an ordinance amendment if
appropriate.
(C) Government Mandated Expense Pass Through. An owner may pass through to
affected mobilehome owners any new or increase in government mandated capital
expenditures and operating expenses including taxes (other than the two percent annual
increase authorized by California Constitution Article XIIIA, section 2(b)) and
assessments, fees and mandated expenses due to code changes subject to the following
procedure:
(1) Upon a petition signed by one adult mobilehome owner of 50 percent of the
spaces subject to rent control in a park or 50 spaces, whichever is less, and filed with the
Clerk within 30 days of the date the owner gives notice of a government mandated
expense pass through to every affected mobilehome owner, the Arbitrator may disallow
or decrease the proposed pass through based upon substantial evidence in the record that
the pass through is not legally proper, or excessive, or that during the pass through period
the owner is including an unreasonably high financing cost and/or return on the expense
being passed through.
(D) Utilities. An owner may separately pass through to a mobilehome owner charges
for all utilities, including, but not limited to, sewer, water, garbage, cable T.V., gas and
electricity, and any increases in such charges (except water, gas and electric utilities
which are not separately metered shall not be passed through, but may be charged as
additional rent). Notwithstanding any provision to the contrary in this section, the owner
shall not pass through any charge or expense for gas or electric service to the extent
prohibited by section 739.5 of the California Public Utilities Code.
(E) Capital Improvement Pass Through. An owner may charge to the affected
mobilehome owner as additional rent the pro rata share of new service and capital
improvement costs including reasonable financing costs if, prior to initiating the service
or incurring the capital improvement cost, the owner has:
(1) Consulted with the mobilehome owners prior to initiating construction of the
improvements or initiating the new service regarding the nature and purpose of the
improvements or services and the estimated cost of the improvements or services;
(2) Obtained the prior written consent of at least one adult mobilehome owner in
each of a majority of the mobilehome spaces which are occupied by the mobilehome
owner to the proposed service or capital improvement. Each space shall have only one
vote.
(F) Capital Replacement Pass Through. Notwithstanding the provision of subsection
E of this section, an owner may charge to the mobilehome owner as additional rent the
pro rata share of capital replacement costs including reasonable financing costs, if not
otherwise prohibited by law, subject to the following procedure:
(1) The owner may seek advance approval for the proposed pass through, before
undertaking the capital project, by following the procedures set forth in Sections 6-66.100
to 6-66.120. If the increase is approved by the Arbitrator, it shall not be effective until the
next regularly scheduled annual rent increase date, provided that the 90-day notice is
issued, the expense is actually incurred and that proper verification is submitted. This
verification shall include, at a minimum, proof of actual costs and payment to vendor. In
the event that the actual cost of the capital expense is less than the approved amount, the
increase shall be adjusted to reflect this decreased amount;
(2) The owner shall give notice of the proposed pass through to each affected
mobilehome owner no later than 12 months after completion of the capital replacement
work;
(3) Upon a petition signed by one adult mobilehome owner of 50 percent of the
spaces subject to rent control in a park or 50 spaces subject to rent control Does this
mean one adult for each space or one adult who owns the required number of spaces?],
whichever is less, and filed with the Clerk within 30 days of the date the owner gives
notice of the pass through to every affected mobilehome owner, the Arbitrator may
disallow or decrease the pass through for capital replacements based upon substantial
evidence in the record that the capital replacement was not necessary, or that the cost of
the capital replacement was excessive, or that during the pass through period, the owner
is including an unreasonably high financing cost and/or return on the expense being
passed through. The owner shall have the burden of proving the necessity for and
reasonable cost of the capital replacements. In determining whether the owner has met its
burden of proving the necessity for and reasonable cost of the capital replacement, the
Arbitrator may consider, among other factors, the reasonableness of the owner's history
of maintenance of the property or improvement to be replaced. The Arbitrator's review
will include, but not necessarily be limited to, the records reflecting past maintenance
work and the cost.
(G) All charges passed through by the owner to the mobilehome owners pursuant to
subsection C and D of this section and additional rent charged pursuant to subsections E
and F of this section must be separate from the base rent and listed separately. All billings
used to calculate a pass through or additional rent to mobilehome owners must be
disclosed within a reasonable time upon request by a mobilehome owner.
(H) Notice. A written notice of each rent increase or new or increased capital
improvement or capital replacement pass through charge made under the provisions of
this section shall be filed by the owner with the Clerk, and provided to each affected
mobilehome owner, at least 90 days before the rent increase goes into effect or as
required by the MRL. The notice shall identify the park and shall specify the dollar
amount of the increase, the percentage of the increase, an itemization of all new or
increased pass throughs and additional rent charges, the specific space affected, the date
the increase will go into effect, how each increase was calculated, and the date the rent on
each affected space was last increased. The notice shall also advise each affected
mobilehome owner of any right to petition for review of a proposed rent increase and that
a petition form may be requested from the Clerk. (Ord. 3648 § 1 (part), 2004)
6-66.050 In-place transfer rent increases-Establishment of new base rent.
(A) Whenever either of the following events occurs, an owner shall be permitted to
charge a new base rent for the mobilehome space as provided in this section:
(1) The termination of the tenancy of the affected mobilehome owner in accordance
with the MRL (California Civil Code sections 798.55 through 798.60, as amended,
excepting section 798.59); or
(2) The voluntary permanent removal of a mobilehome by a mobilehome owner. A
removal of the mobilehome from the space for the purpose of performing rehabilitation
or capital improvements to the space or for the purpose of upgrading the mobilehome
shall not constitute a voluntary removal of the mobilehome.
(B) An owner who applied for, in 1995, and received approval for a base rent
increase upon an in-place transfer of ownership of a mobilehome, may implement a
maximum of two increases on the same space. Each increase shall be the lesser of $50.00
per month or the approved base rent as adjusted each year by 100 percent of the August
CPI. The parks affected by this provision are Coddingtown Mobile Estates, Journey's
End, The Orchard, Rancho Cabeza, Rancho San Miguel, Rincon Valley, Santa Rosa
Village and Woodcrest.
(C) An owner may not condition an in-place transfer of a mobilehome or condition
assignment of an existing lease to a prospective mobilehome owner, upon agreement to
an increased rent in anticipation of the in-place transfer. This subsection shall not apply
to specific conditions included in a lease exempt from rent control which allows an owner
to condition assignment in a manner prohibited by this section. For purposes of this
subsection, "a lease exempt from rent control" means a lease meeting, in all respects, the
criteria of subdivision (b) of the MRL, California Civil Code section 798.17, as such
criteria are presently enacted or may hereafter be amended. (Ord. 3648 § 1 (part), 2004)
6-66.060 Fair return rent increases.
If an owner presents evidence to the Arbitrator, including any financial records requested
by the Arbitrator, which proves that the owner is denied a fair return by the rent control
provisions of this chapter, the Arbitrator may authorize an increase in rents as deemed
appropriate by the Arbitrator to provide a fair return to the owner. The Arbitrator shall
use the method set forth in subsection 6-66.120(C) to determine the fair return. (Ord.
3648 § 1 (part), 2004)
6-66.070 Rent freeze or rent rollback.
(A) Upon the petition signed by one adult mobilehome owner of 50 percent of the
spaces subject to rent control in a park or 50 spaces subject to rent control, whichever is
less, the Arbitrator may prohibit future rent increases for spaces governed by this chapter,
upon its determination that maintenance by the owner has been substantially reduced.
The determination shall be based upon substantial evidence in the record. The prohibition
may be continued until the Arbitrator determines that maintenance by the owner has been
restored to a reasonable level.
(B) Upon petition by one or more affected mobilehome owners, an Arbitrator may
prohibit future rent increases, or order a rollback of the existing rent as to those
petitioners, upon its determination that after September 1, 1993, an owner instituted a rent
increase inconsistent with the criteria established by this chapter. The determination shall
be based upon substantial evidence in the record. The prohibition may be continued until
the Arbitrator determines that the rent has become consistent with this chapter. (Ord.
3648 § 1 (part), 2004)
6-66.080 Time of allowed rent increase/adjustment.
(A) Once within a 12-month period, the owner may implement a CPI rent adjustment
(subsection 6-66.040(A)), if any, or a fair return increase (Section 6-66.060), but not
both.
(B) A capital replacement pass through subsection 6-66.040(F) may only be
implemented on the effective date of the CPI or fair return rent adjustment.
(C) The following increases or adjustments may be implemented at any time during
the year:
(1) Government mandated expense pass through (subsection 6-66.040(C));
(2) Utility pass throughs (subsection 6-66.040(D));
(3) Capital improvements (subsection 6-66.040(E));
(4) In-place transfer rent increases (Section 6-66.050).
Any increases subject to arbitration shall be implemented after the final ruling of the
arbitration.
(D) Rent freeze and rent rollbacks shall be implemented at the time they are ordered
(Section 6-66.070). (Ord. 3648 § 1 (part), 2004)
6-66.090 Arbitration.
(A) Matters Subject to Arbitration.
(1) An owner shall file with the Clerk:
(a) An application seeking to increase space rents beyond 100 percent of the CPI to
provide a fair return to the owner as allowed by Section 6-66.060.
(2) Affected mobilehome owners may file with the Clerk:
(a) A petition objecting to a government mandated expense pass through as allowed
by subsection 6-66.040(C);
(b) A petition objecting to a capital replacement pass through as allowed by
subsection 6-66.040(F);
(c) A petition for rent freeze as allowed by subsection 6-66.070(A);
(d) A petition for rent rollback as allowed by ssubection 6-66.070(B).
(B) These petitions and applications shall be decided by the Arbitrator.
(C) Cost of Arbitration. The cost of arbitration shall be paid by the Clerk out of
revenue from the rent stabilization administration fee. The Arbitrator may reimburse the
City by assessing the cost of the arbitration to either party if the Arbitrator determines
that the position taken by the party is frivolous. (Ord. 3648 § 1 (part), 2004)
6-66.100 Procedures for fair return notice and application and petition forms.
(A) Notice. At least 10 days prior to submission of a fair return application or a
petition to the Clerk, the applicant or petitioner shall mail a notice and a copy of the
application or petition to the owner and each affected mobilehome owner in the park. The
notice shall be on a form specified by the Clerk. The supporting documents for the
application or petition shall be available for review at the park's office. One copy of the
supporting documents shall be provided by the applicant or petitioner at no cost to the
other party. All fair return notices shall include the following information:
(1) The amount of the rent increase both in dollars and as a percentage of the existing
rent, how it was calculated, an itemization of all pass throughs and additional rent
charges, information that explains and supports the level of increase proposed including,
at a minimum, a summary of the owner's net operating income for the base year and the
preceding 24 months and other relevant information that supports the level of rent
increase desired, the effective date of the increase and that copies of the supporting
documents shall be provided by the owner at no cost to the mobilehome owners'
representative and be available to the mobilehome owners at the park's office for
inspection;
(2) The name, address and telephone number of the Clerk or designee, a statement to
inform the mobilehome owners to contact the Clerk or designee for an explanation of the
provisions of this chapter, and that a roster of affected mobilehome owners can be
requested from the Clerk; and
(3) A copy of the official petition form which is to be used for the process
established by this chapter.
(B) Application/Petition Forms. The application or petition shall be filed with the
Clerk on the form prescribed by the Clerk and must be accompanied by all supporting
material necessary to support the request. The application and petition shall contain the
following declaration: "I declare under penalty of perjury that the foregoing is true and
correct." The application shall be dated and subscribed by the applicant(s) and shall state
the place of execution.
(1) Within five working days of receipt, the Clerk shall complete a preliminary
review of the application or petition. Applications or petitions which are incomplete will
not be considered properly filed.
(2) No further action shall take place on applications or petitions which are not
properly filed, and the Clerk may decline to accept such application and/or return them to
the petitioner immediately after the preliminary review with a notice of the defects.
(3) When the Clerk determines that the application or petition is complete, the Clerk
shall send a written notice of confirmation of receipt of a completed application or
petition to the parties.
(4) In capital replacement proceedings and in government mandated capital
expenditure and operating expense proceedings, affected mobilehome owners shall have
30 calendar days after receipt of the confirmation of the completed application to file
with the Clerk a petition objecting to the rent increase signed by one adult in at least 50
percent of the mobilehome spaces subject to rent control.
(C) Insufficient Objection-Capital Replacement or Government-Mandated Pass
Through Proceeding-Clerk Action. If less than the required number of affected
mobilehome owners object to a proposed capital replacement or government-mandated
pass through, or if objection is withdrawn, including any amendments, before or after the
meet and confer process, the Clerk shall approve the requested pass through. (Ord. 3648
§ 1 (part), 2004)
6-66.110 Procedure for meet and confer.
Within 10 working days of the date of the Clerk's notice of a completed application or
petition and prior to assignment of an Arbitrator, affected mobilehome owners and
owners shall meet and confer with each other's representatives. The time, place and date
of the meeting shall be agreed to by the parties or, if the parties cannot agree, determined
by the Clerk. Written notice of the scheduled meeting shall be given by the applicant or
petitioner. At the meeting, representatives of the parties shall exchange documentary
evidence that the parties, in good faith then know, will be used to support their respective
positions in an arbitration and discuss the issues in dispute. In the case of an owner, all
financial data upon which any proposed increase is claimed shall be supplied to affected
mobilehome owner representatives at the time of the meet and confer meeting. The
parties may request that the Clerk provide a mediator, at no cost to the parties, to assist
with the meet and confer process. The Arbitrator may deny an application based on the
applicant's failure to participate in good faith in the meet and confer process. (Ord. 3648
§ I (part), 2004)
6-66.120 Procedures for arbitration.
(A) The Clerk shall give written notice to the applicant or petitioners and mobilehome
owner representative that the application/petition has been referred to arbitration.
(1) An Arbitrator shall be appointed in the following manner:
(a) The Clerk shall maintain a list of qualified arbitrators.
(b) Assignment of Arbitrator and Hearing Date. The Clerk shall choose three
possible Arbitrators and present them to the residents' representative and the owner.
Within five days each party may challenge one candidate. The one remaining shall be the
selected Arbitrator. If both parties challenge the same candidate, the Clerk shall choose
between the two remaining candidates. The Clerk shall set a date for the arbitration
hearing no sooner than 21 or no later than 30 working days after the Arbitrator is
assigned. The owner and affected mobilehome owners shall be notified immediately in
writing by the Clerk of the date, time and place of the hearing and this notice shall be
served either in person or by ordinary mail. The parties may agree, in writing, to extend
these times. The Arbitrator may extend the date for the arbitration hearing upon a
showing of good cause.
(2) The Arbitrator shall conduct a hearing with the parties and/or their
representatives. During this hearing process, the concerns of each party shall be discussed
and the Arbitrator shall indicate the amount and nature of information needed from any
party in order to reach a determination. In fair return proceedings in Section 6-66.060,
this shall include four years of the income and expense portion of the general ledgers for
the park. All information submitted shall be in writing and shall be certified in the same
manner as set forth in subsection 6-66.100(B).The applicant shall have the burden of
proof unless other sections of this chapter specify otherwise. Each party shall comply
with the Arbitrator's request for information within five working days of the request.
Additional information provided to the Arbitrator shall be immediately available to the
owner or affected mobilehome owner representative which will have five working days
to give written comment to the Arbitrator. The Arbitrator may proceed under this part
regardless of whether any party defaults in providing any of the requested information.
(B) Arbitration Determination.
(1) Within 21 days of the hearing, but no later than 90 days from the date of the
owner's rent increase notice, the Arbitrator shall deliver his or her decision on the
application or petition and a bill for services to the Clerk.
(2) The rent increase in a fair return proceeding shall not exceed the increase
requested in the application.
(3) The Clerk shall provide the result of the Arbitrator's decision to the affected
parties.
(4) The Arbitrator's decisions are final and not appealable to the City Council.
(C) Method to Determine a Fair Return.
(1) The base year for the purpose of this section shall be the last full fiscal year prior
to the park becoming subject to this chapter. The Arbitrator may establish an alternative
base year if the owner is unable to produce records of the last full fiscal year prior to the
park becoming subject to rent control.
(2) It shall be presumed that the net operating income produced by the property
during the base year provided a fair return. An owner shall be entitled to rents to earn a
just and reasonable return and to maintain and increase their base year net operating
income in accordance with subsection (C)(4) of this section. This method is called
maintenance of net operating income (MNOI) and shall be included in all applications.
(3) The applicant or the affected mobilehome owners may present evidence to rebut
the presumption of fair and reasonable return based upon the base year net operating
income. To make such a determination and in order to adjust to the base year net
operating income, the Arbitrator must make the following finding:
(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 that the base year operating expenses reflect average
expenses for the property over a reasonable period of time. In considering whether the
base year net operating income yielded more or less than a fair net operating income, the
Arbitrator shall consider the following factors:
(i) Substantial repairs were made due to damage caused by uninsured disaster or
vandalism;
(ii) Maintenance and repairs were below accepted standards so as to cause significant
deterioration of housing services;
(iii) Other expenses were unreasonably high or low notwithstanding prudent business
practice; and
(iv) The rent in the base year was disproportionately low due to the fact that it was
not established in an arms-length transaction or other peculiar circumstances.
(4) Fair Net Operating Income. The Arbitrator shall submit a determination based on
rental income which will provide the owner a net operating income which shall be
increased by 100 percent of the percentage increase in the CPI over the base year's CPI
index. The base year CPI shall be the CPI for the first day of June. For purposes of this
section, the current CPI shall be the CPI last reported as of the date of the completed
application.
(5) Net operating income of a mobilehome park means the gross income of the park
less the operating expenses of the park.
(6) Gross income means the sum of the following:
(a) Gross space rents computed as gross space rental income at 100 percent
occupancy (but excluding rent attributed to a space occupied by a park employee who
receives the space rent free as part of the employee's compensation); plus
(b) Other income generated as a result of the operation of the park, including, but not
limited to, fees for services actually rendered; plus
(c) All other pass through revenue received from mobilehome owners except capital
pass throughs and gas and electric; minus
(d) Uncollected space rents due to vacancy and bad debts to the extent that the same
are beyond the owner's control. There is a rebuttable presumption that uncollected space
rents in excess of the average of the current and past three years uncollected rents (each
year's rent shall be adjusted by the change in the CPI between that year and the final year
of the four-year period) are excessive and shall not be deducted from gross income.
(7) Operating expenses means:
(a) Real property taxes and assessment;
(b) Advertising costs;
(c) Management and administrative expenses including the compensation of
administrative personnel;
(d) Repair and maintenance expenses for the grounds and common facilities
including, but not limited to, landscaping, cleaning and repair of equipment and facilities;
(e) In addition to the management expenses listed above, where the owner performs
onsite managerial or maintenance services which are uncompensated, the owner may
include the reasonable value of such services. Owner-performed labor shall be limited to
five percent of gross income unless the Arbitrator finds that such a limitation would be
substantially unfair in a given case. No credit for such services shall be authorized unless
an owner documents the hours utilized in performing such services and the nature of the
services provided;
(f) Operating supplies such as janitorial supplies, gardening supplies, stationery and
so forth;
(g) Insurance premiums related to operation of the park prorated over the life of the
policy;
(h) Payroll taxes, business, utility, license and permit fees;
(i) Dues;
0) Consultant services for park operation and maintenance;
(k) All operating expenses must be reasonable and necessary. Whenever a particular
expense exceeds the normal industry or other comparable standard, the owner shall bear
the burden of proving the reasonableness of the expense. To the extent that an Arbitrator
finds any expense to be unreasonable, the Arbitrator shall adjust the expense to reflect the
normal industry or other comparable standard;
(1) There is a rebuttable presumption that expenditures in the current year are
unreasonable to the extent that they substantially exceed the average of the current and
past three years (each year's expenses shall be adjusted by the change in the CPI between
that year and the final year of the four-year period);
(m) Operating expenses shall not include the following:
(i) Mortgage debt service expenses;
(ii) Land-lease expenses;
(iii) Depreciation;
(iv) Income taxes;
(v) Electric and gas expenses included in Section 739.5 of the California Public
Utility Codes;
(vi) The cost of government mandated expenses (subsection 6-66.040(C)), capital
improvements (subsection 6-66.040(D)), or capital replacements (subsection 6-
66.040(F)).
(8) Notwithstanding any other provisions of the ordinance codified in this chapter,
the Arbitrator is authorized to approve any rent increase that is constitutionally required
by law to yield a fair return.
(E) Subpoenas. The parties may obtain the issuance and service of a subpoena for the
attendance of witnesses or the production of other evidence at the arbitration hearing.
Subpoenas shall be issued and attested by the Clerk. Issuance of the subpoena must be
obtained upon the filing with the Clerk of the City of an affidavit or declaration, under
oath, setting forth the name and address of the proposed witness; specifying the exact
things to be produced and the relevancy to the issues involved; and stating that the
witness has the desired things in his/her possession or under his/her control.
Service of the subpoena on a witness to attend arbitration must be at least five working
days before the hearing. Service of a subpoena duces tecum must be at least 21 days
before the hearing. Any party served with a subpoena duces tecum must produce copies
of the requested items to the subpoening party no later than 10 days before the hearing.
A subpoena need not be issued when the affidavit or declaration is defective in any
particular. No arbitration hearing may be continued due to the failure to file a timely
request, or to timely serve a subpoena. Any person who refuses, without lawful excuse, to
attend the arbitration or to produce relevant evidence as required by a subpoena served
upon that person shall be guilty of a misdemeanor.
No subpoena shall issue until after the parties have met and conferred as required in
Section 6-66.110.
(F) Increases for Capital Expense. Increases attributed to a capital expense, as
approved by the Arbitrator to provide a park with a fair return, shall not be included in
base rent. These increases must be separately itemized on the monthly rent invoice and
terminate at the end of the approved amortized period. Advance approval and effective
date of the increase shall be as allowed in subsection 6-66.040(F)(1).
(G) Rent Increase Effective Date. Rent increases approved by the Arbitrator, as
determined necessary to provide an owner with a fair return, shall be allowed upon the
effective date given by the applicant in the notice to the affected mobilehome owners,
required in section 798.30 of the California Civil Code. (Ord. 3648 § 1 (part), 2004)
6-66.130 Refusal of mobilehome owner to pay illegal rent.
An affected mobilehome owner may refuse to pay any rent in excess of the maximum
rent permitted by this chapter. The fact that such unpaid rent is in excess of the maximum
rent shall be a defense in any action brought to recover possession of a mobilehome space
for nonpayment of rent or to collect the illegal rent. (Ord. 3648 § 1 (part), 2004)
6-66.140 Disclosures.
An owner shall disclose to each prospective mobilehome owner the current and
proposed base rent for the mobilehome space and the rental agreement options required
by this section and Section 6-66.150, provided each prospective mobilehome owner with
a copy of this chapter, and disclose to the prospective mobilehome owner that if the
prospective mobilehome owner signs a lease with a term of more than one year, that lease
will be exempt from rent control. The owner shall give the required disclosure and
provide a copy of this chapter to the prospective mobilehome owner at the time that the
owner, or owner's representative, receives the prospective mobilehome owner's
application for tenancy. The required disclosures shall be made in a form approved by the
Clerk, and the owner shall obtain a signature of the prospective mobilehome owner on
the disclosure form acknowledging receipt of the disclosures. An owner must retain the
signed disclosure form throughout the entire tenancy of the mobilehome owner. This
signed form shall be made available to the Clerk upon reasonable written notice. (Ord.
3648 § 1 (part), 2004)
6-66.150 Prospective mobilehome owner-Tenancy 12 months or less.
All prospective mobilehome owners shall be offered the option of a tenancy of 12
months or less upon terms consistent with the provisions of the ordinance codified in this
chapter. This section shall not apply to prevent a mutually agreed upon assignment
between an owner and an existing mobilehome owner of an existing lease, provided any
such assignment does not violate subsection 6-66.050(C). (Ord. 3648 § 1 (part), 2004)
6-66.160 Rent stabilization administration fees.
The costs of administration of this chapter shall be paid by the imposition of an annual
rent stabilization administration fee established by resolution of the City Council. The fee
is chargeable against the total number of mobilehome spaces in the City subject to rent
control determined on a date certain each year to be established by the City Council. The
owner who pays these fees may pass through to the mobilehome owners, subject to rent
control on the date established by the City Council, 50 percent of the fees assessed
against a mobilehome space. The fee shall be due on a date established by the City
Council but may be paid in quarterly installments by the owners. Owners of parks
annexed to the City after September 17, 1993, shall be charged the fee established by
resolution beginning on the effective date of the annexation. (Ord. 3648 § 1 (part), 2004)
6-66.170 Amendment.
Any amendment to this chapter shall require a prior public hearing before the City
Council with notice thereof published in a newspaper of general circulation in the City at
least 10 days prior to the hearing. (Ord. 3648 § 1 (part), 2004)
6-66.180 Violation.
Every person who violates any provision of this chapter is guilty of a misdemeanor
and shall be subject to the provisions of Section 1-28.010 of this code. This section shall
not apply to the Arbitrator or officers or employees of the City. (Ord. 3648 § 1 (part),
2004)
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BOARD OF SUPERVISORS, COUNTY OF LAKE, STATE OF CALIFORNIA
ORDINANCE NO.
AN ORDINANCE ADDING TO CHAPTER 32 TO THE LAKE COUNTY CODE
ESTABLISHING A MOBILE HOME RENT STABILIZATION PROGRAM
THE BOARD OF SUPERVISORS OF THE COUNTY OF LAKE ORDAINS AS
FOLLOWS:
SECTION ONE: Chapter 32 is hereby added to the Lake County Code to read as follows:
"CHAPTER 32. MOBILE HOME RENT STABILIZATION PROGRAM
ARTICLE I. IN GENERAL
Sec. 32.1. Title.
This Ordinance may be cited as the Mobile Home Park Rent Stabilization Program
Ordinance of the County of Lake.
Sec. 32.2. Findin,s.
(a) Mobile home parks are a valuable resource of affordable housing for low and
moderate income individuals and families. There are considerable differences between
residents of mobile home parks and tenants of other types of rental properties. It is
generally impractical to move a mobile home because of the significant cost to do so. A
mobile home owner typically rents a plot of land from the owner of a mobile home park.
The park owner provides private roads within the park and may also provide certain
common facilities and utilities. The mobile home owner often invests in site-specific
improvements such as a driveway, steps, walkways, porches, or landscaping. When the
mobile home owner wishes to move, the mobile home is usually sold in place. The
immobility of the mobile home, the investment of the mobile home owner, and restriction
on mobile home spaces, has sometimes led to what has been perceived as an economic
imbalance of power in favor of mobile home park owners.
(b) Many residents of mobile home parks have expressed concerns about both the
significant increases in mobile home park space rents and the potential for unexpected
Ordinance Adding to Chapter 32 to the Lake County Code
Establishing a Mobile Home Rent Stabilization Program
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future increases. In response to those concerns, the Board of Supervisors created an Ad
Hoc committee, the Mobile Home Task Force, the composition of which included two
members of this Board, mobile home park residents and mobile home park owners. The
Mobile Home Task Force devoted considerable time and effort over the course of their
numerous meetings, culminating in the development of a supplemental lease agreement,
which agreement limits both the amount and frequency of rental increases imposed upon
mobile home park residents.
(c) The Board of Supervisors adopted Resolution No.2008-117 on September 16, 2008,
whereby the Board endorsed the supplemental lease agreement and encouraged all mobile
home park owners to agree to offer this Agreement to all eligible residents of their
respective parks.
(d) The Board of Supervisors finds and declares that a Mobile Home Rent Stabilization
Program is necessary to facilitate and encourage fair bargaining between mobile home
park owners and park residents in order to reach mutually satisfactory agreements as to
space rental rates in mobile home parks, which agreements preserve the value of the
residents' mobile homes and the value of the owners' mobile home parks. Absent such
agreements, the Board hereby finds it is necessary to protect the residents from
unreasonable rent increases in a manner which still provides for the interest of the park
owners in achieving a fair and reasonable return on their property. Administration of this
Ordinance shall be under the direction of the Lake County Mobile Home Rent
Stabilization Program Administrator.
(e) The Board of Supervisors finds that the adoption of the ordinance codified in this
chapter will not have a significant, substantial or adverse effect on the physical
environment of the community because enactment of this chapter involves no deviation
from the General Plan and no change in the present use of any property within the
unincorporated areas.
H
Ordinance Adding to Chapter 32 to the Lake County Code
Establishing a Mobile Home Rent Stabilization Program 2
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Sec. 32.3. Purpose.
The purpose of this chapter is to:
(a) Encourage the fair and reasonable practices utilized by most mobile home park
owners and managers in the County.
(b) Encourage good and productive relationships between mobile home park owners and
residents, and mobile home park owners and managers;
(c) Prevent excessive and unreasonable increases in mobile home park space rents;
(d) Permit mobile home park owners to fairly run their businesses and receive a fair
return on their investments; and
(e) Help preserve a valuable form of affordable housing within the County of Lake.
32.4. Definitions..
(a) Approved Long-Term Lease Supplement. The Approved Long-Term Lease
Supplement is the supplemental lease agreement approved by Board of Supervisors
pursuant to Resolution No.2008-117. The Approved Supplement, included here as
Appendix "A", sets forth the applicable terms to be included in any long-term lease
agreement or as a supplement to any existing written lease agreement.
(b) Base Rent. The authorized rent, as calculated pursuant to the provisions of Section
32.11 herein, plus any rent increase allowed under this Chapter or any rent adjustment
attributable to vacancies as provided in Section 32.10(c) herein.
(c) Consumer Price Index. The Consumer Price Index all items for the western region for
all-urban consumers as reported by the Bureau of Labor Statistics of the United States
Department of Labor.
(d) In-Place Transfer. The transfer of the ownership of a mobile home with the mobile
home remaining on the mobile home park space following the transfer.
(e) Mobile Home. A structure transportable in one (1) or more sections, designed and
equipped to contain not more than one (1) dwelling unit, to be used with or without a
foundation system.
Ordinance Adding to Chapter 32 to the Lake County Code
Establishing a Mobile Home Rent Stabilization Program
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(f) Mobile Home Owner or Resident. A person entitled to occupy a mobile home
dwelling space pursuant to ownership thereof or a rental or lease agreement with the
owner thereof. To be entitled to the protections of this Ordinance, a mobile home owner
or resident must occupy the mobile home as his/her principal residence.
(g) Mobile Home Park. Any area or tract of land where T# or more mobile home
lots are rented or leased, or held out for rent or lease, to accommodate mobile homes used
for human habitation for permanent, as opposed to transient, occupancy.
(h) Mobile Home Park Owner. A mobile home park owner, mobile home owner, lessor
or sublessor who receives or is entitled to receive rent for the use and occupancy of any
rental unit or portion thereof, and the agent, representative or successor of any of the
foregoing and one who reports to the Internal Revenue Service any income received or
loss of income resulting from such ownership or claims any expenses, credits, or
deductions because of such ownership.
(i) Mobile Home Hearing )Board. A Hearing Board, consisting of three (3) members,
exclusive of elected officials.
0) Mobile Home Rent Stabilization Administrator or Administrator. The individual
designated by the Board of Supervisors to administer the County's Mobile Home Rent
Stabilization Program.
(k) Mobile Home Space. The site within a mobile home park intended and/or used for the
location of a mobile home and any structures, accessory or appurtenant thereto.
(1) Space Rent or Rent. Any consideration, including any bonus, benefit or gratuity,
demanded or received for and in connection with the use or occupancy of a mobile home
space within a mobile home park, 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 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 or rent does not include any
separately billed utility fees and charges for propane gas, electricity, water, cable
Ordinance Adding to Chapter 32 to the Lake County Code
Establishing a Mobile Home Rent Stabilization Program
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television, garbage, or sewer service.
(m) Rent Adjustments. Any rent increase or decrease demanded of or paid by a mobile
home park resident, including any reduction in housing services without a corresponding
reduction in the monies demanded or paid for in rent.
(n) Rental Agreement. A written agreement between a mobile home park owner and
mobile home park resident establishing the terms and conditions of the occupancy and use
of a mobile home space in a mobile home park. A lease is a rental agreement.
ARTICLE II. MOBILE HOME HEARING BOARD ESTABLISHMENT AND
POWERS
Sec. 32.5. Establishment of Hearing Board. The Board of Supervisors hereby
establishes a Mobile Home Hearing Board for the County of Lake for the purpose of
hearing and determining any petitions filed pursuant to Section 32.16 or Article V of this
chapter.
Sec. 32.6. Composition. The Board shall consist of three (3) regular members and two (2)
alternate members. One regular member shall be a mobile home park resident whose
principal residence is in the unincorporated area of Lake County; one regular member shall
be a mobile home park owner of a mobile home park located in the unincorporated area of
Lake County. The two alternate members shall be a mobile home park resident from a
different mobile home park in the unincorporated area of Lake County and a mobile home
park owner of a different mobile home park in the unincorporated area of Lake County.
The remaining regular member shall be a resident of the unincorporated area of Lake
County who is neither a mobile home park resident or owner and who has no conflict of
interest due to a relationship with either or both. Candidates for membership shall submit
the County's standard application form used for consideration of appointment to various
County boards and commissions, which form is available from the Office of the Clerk of
the Board of Supervisors. The Board of Supervisors shall appoint the members in
accordance with all applicable County procedures.
Ordinance Adding to Chapter 32 to the Lake County Code
Establishing a Mobile Home Rent Stabilization Program
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Sec. 32.7. Term.
(a) Each regular member of the Mobile Home Board shall serve for a term of two (2)
years. For the first Board, the members shall be appointed to serve terms which shall
conclude on January 1, 2011. Thereafter, the successors shall be appointed for terms of
two (2) years. Each regular member shall hold office until a new member has been duly
appointed and assumed his or her duties. Each alternate member of the Board shall serve
for a term of two (2) years except as provided herein. Each alternate member shall hold
office until a new alternate member has been duly appointed and assumes his or her duties.
If a vacancy occurs or an office becomes vacant other than by expiration of a term, it shall
be filled by the Board of Supervisors by appointment as previously prescribed herein for
the unexpired portion of such member's term. Notwithstanding the above provisions of
this paragraph, a member may be removed, at any time, with cause, by a majority vote of
the Board of Supervisors. Further notwithstanding the above provisions of this
paragraph, any member who is absent without sufficient cause as determined by the
Board of Supervisors from three (3) consecutive meetings of the Mobile Home Board
which such member was required to attend shall be deemed to have vacated his or her
office.
(b) The Board of Supervisors hereby reserves the right to dissolve the Mobile Home
Hearing Board at any time upon majority vote to do so and transfer the functions and
duties of the Mobile Home Hearing Board to an Arbitrator selected by the Board of
Supervisors. Said Arbitrator shall conduct those functions and duties according to the
provisions herein applicable to the Mobile Home Hearing Board.
Sec. 32.8. Powers and Duties of the Board.
The Mobile Home Hearing Board may approve, modify, or deny major rent adjustments as
defined in Article V herein and may determine whether the action or proposed action
which is the subject of said petition is valid, authorized, and in conformity with Section
32.16 pursuant to the criteria and conditions enumerated in this chapter.
Ordinance Adding to Chapter 32 to the Lake County Code
Establishing a Mobile Home Rent Stabilization Program
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ARTICLE III. APPLICABILITY AND EXEMPTIONS
Section 32.9. Applicability
This Ordinance shall be applicable to all mobile home park spaces within the
unincorporated areas of the County of Lake, unless exempt pursuant to the provisions of
this Ordinance and/or pursuant to state or federal law. Nothing in this Ordinance shall be
deemed to supersede any provision of California Civil Code Sections 798, et seq. as
written and/or as it may be amended.
Section 32.10. Exemptions
The provisions of this Ordinance shall not apply to:
(a) Approved Long-Term Lease Supplement
1. A mobile home park shall be exempt from this chapter if it has entered into the
Approved Long Term Lease Supplement. The mobile home park owner must provide all
eligible mobile home owners and residents who, as of [date] , are not
parties to an existing long-term rental agreement having an initial term in excess of twelve
(12) months, the opportunity to enter into the Approved Long-Term Lease Supplement,
and provide proof of offer of said Approved Long-Term Lease Supplement to the County
of Lake.
2. The Approved Long-Term Lease Supplement is identical to the terms as approved by
Board of Supervisors resolution. Alternatively, any long-term lease which offers the same
or better protections to the mobile home owners and residents may be used with approval
of the Mobile Home Rent Stabilization Program Administrator. As long as the Approved
Long-Term Lease Supplement is offered to the mobile home owners and residents, the
park owner may offer other rental agreements to the mobile home owners and residents for
their consideration and acceptance/rejection.
3. The mobile home owner or resident must be provided with an Information Sheet, which
among other things, must set forward the rights of residents and owners under this Chapter
as well as additional information as determined by the Mobile Home Rent Stabilization
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Establishing a Mobile Home Rent Stabilization Program
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Program Administrator.
4. The mobile home park owner must submit verification of compliance with this section
to the County for each current and incoming resident, in accordance with procedures as set
forth by the Mobile Home Rent Stabilization Program Administrator. The mobile home
park owner must also submit verification of compliance upon request of the County.
(b) State Law Exemptions.
1. Spaces that are subject to a rental agreement which exempts that space from rent
regulation pursuant to the California Mobile Home Residency Law, California Civil Code
Section 798 et seq.
2. Newly constructed spaces, which are exempted pursuant to Civil Code Section 798.45.
3. Spaces which are exempt pursuant to Civil Code Section 798.21 (which exempts
spaces which are not the principle residence of the mobile home owner).
4. Any space otherwise exempted by State law.
5. Units Owned or Operated by Government Agencies. The provisions of this chapter
shall not apply to any rental unit whose rent is subsidized pursuant to a public program
that limits the rent that can be charged for the mobile home park space.
(c) Vacancies
1. Subject to the limitations of paragraphs 2 and 3 below, if a mobile home space or
mobile home is voluntarily vacated, abandoned or repossessed, or vacated pursuant to
California Civil Code Section 798.56 or 798.75, the mobile home park owner may adjust
the space rental rate to an amount he/she in his or her discretion may determine.
2. Subject to the provisions of Civil Code Section 798.17, if the mobile home is sold in
place and is to remain on site, the landlord may only increase the rental rate of the space to
to new owner to an amount that is no greater than the average of the three highest rentals
then currently being charged by the park owner for resident owner occupied spaces of
comparable size, location, and amenities in the park.
3. If a resident owner must move from his or her mobile home because of a need for long-
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term medical care or custodial care, the space shall remain subject to this Ordinance
during the time the owner is absent and remains incapacitated. In those parks which allow
subletting, the absent and incapacitated owner may sublet the mobile home for a charge
not to exceed the space rent and utilities and all legally allowable pass-through costs for a
period of time to exceed twenty-four (24) months without removing the space from the
protection of this Ordinance.
(d) Tenant Approval
This Ordinance does not apply if two-thirds of all residents in a mobile home park affected
by a rent increase or other action give their approval in writing as evidenced by the
signature of one resident for each space or in an election called to consider the matter with
each space casting one vote. The mobile home park owner shall supply proof of such
approval to the Mobile Home Park Rent Stabilization Administrator for verification.
ARTICLE IV. SPACE RENT INCREASE LIMITATIONS
Sec. 32. 11. Base Rent - Initial Calculation.
Except as hereinafter provided, an owner shall not demand, accept, or retain rent for a
mobile home space exceeding rent in effect for such space on the effective date of this
Ordinance. If a previously rented mobile home space was not rented on the effective date
of this Ordinance, the mobile home park owner shall not, except hereinafter provided,
demand, accept, or retain rent for such space exceeding the rent in effect during the last
month the space was rented prior to the effective date of this Ordinance.
Sec. 32.12. Space Rent Ceiling Adjustment.
(a) Permissive Annual Adjustment
Except as otherwise provided herein, from and after the effective date of this Ordinance,
the space rent payable for the use or occupancy of any mobile home space shall not be
adjusted in any twelve-month period more than once and no increase resulting from said
adjustment shall exceed the percent change in the Consumer Price Index. This allowance
shall not exceed five percent (5%). No application or permission is required for the annual
Ordinance Adding to Chapter 32 to the Lake County Code
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adjustment under this section.
(b) Notice of Permissive Annual Rent Increase.
1. Notice by Mobile Home Rent Stabilization Administrator. The annual rent increase
shall be annually calculated by the Mobile Home Rent Stabilization Administrator, and
posted by February 1 of each year both in the County Courthouse located at 255 North
Forbes Street in Lakeport, California and on the County of Lake website. The information
shall also be mailed to each non-exempt mobile home park owner.
(2) Notice in Mobile Home Parks. A copy of the notice shall be posted by the park owner
or manager in a prominent place in each non-exempt mobile home park within three (3)
days after it is received by the mobile home park owner.
(c) No Decrease if CPI Decreases. In the event that the CPI decreases, no rent decrease
shall be required pursuant to this section.
(d) Compliance with State Law. Rent increases permitted pursuant to this section shall
not be effective and shall not be demanded, accepted, or retained until the mobile home
park owner has given the notice required by State law.
Sec. 32. 13. In-Place and Other Transfer of Ownership of Mobile Homes.
(a) Increase Permitted. Upon an in-place sale or transfer of the ownership of a mobile
home, a park owner may increase the space rent by ten (10) percent.
(b) Allowable Frequency of Increases. Only one (1) increase of ten (10) percent shall be
allowed pursuant to this section within a sixty (60) month period.
(c) Types of Transfers Excluded from this Section. In-place sales and transfer of
ownership of the purposes of this chapter shall not include transfer to the conservator,
guardian or trustee of a homeowner, transfers to a homeowner's trust (provided that the
beneficiaries entitled to ownership of the mobile home are members of the homeowner's
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immediate family), for transfers to a surviving spouse, parent, or children of the
homeowner.
(d) Replacement of Mobile Home not a Transfer. No increase may be imposed pursuant
to this section pursuant to the removal of a mobile home from a park by a homeowner
already residing in the park for the purpose of replacing a mobile home with a new or
different mobile home.
(e) Advance Notice of Allowable Rent Increases Pursuant to this Section. A mobile
home owner who intends to offer the mobile home for sale may request a written
statement from the mobile home park owner specifying the rent which will be charged to a
new mobile home owner. The mobile home park owner shall provide this written
statement within ten (10) days of the request, which shall be deemed received on the day
that the notice is personally delivered or within three (3) days of the time that the notice is
mailed.
Sec. 32.14. Pass-through of Property Tax Increases Pursuant to the Sale of a Park/
Special Assessments.
(a) A mobile home park owner may pass through property tax increases resulting from a
reassessment of the park as a consequence of the sale of the park, provided that the
purchaser of the park is not a member of the seller's immediate family or a surviving
spouse. This section shall not authorize any pass-through that is not permitted under State
law.
(b) The amount of the property tax increase resulting from the sale of a park for the year in
which the sale took place shall be computed by comparing the annual property tax for the
property tax year (July 1 st-June 30th) prior to the sale of the property with the property tax
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for the property tax year in which the transfer occurred. The amount of the property tax
increase for subsequent years shall be computed by comparing the annual property tax for
the property tax year (July 1 st-June 30th) prior to the sale of the property with the property
tax for the property tax year following the year in which the transfer occurred. The
property tax comparisons pursuant to this section shall not take into account the portion of
the property tax increase attributable to County-wide increase in assessed values, such as
the two (2) percent annual increase that is ordinarily applied to all properties.
(c) A park owner may pass through cost increases resulting from new types of property
assessments. The amount of the any property tax increase or cost increase resulting from a
new type of property assessment shall be prorated on a monthly basis among all of the
spaces in a park.
Sec. 32.15. Administrative Fees.
(a) A park owner may increase the space rent payable for a mobile home space within any
twelve-month period to apportion and pass through, on a pro-rata basis, to each mobile
home space subject to the provisions of this chapter, the allowable percentage of County
administrative fees pursuant to Section 32.36.
(b) The park owner shall provide to all affected residents documentation supporting the
allowable amount to be collected in order to recover a portion of rent stabilization
administration fees. At a minimum such documentation shall include: billing notices or
other equivalent documents from the County imposing the rent stabilization administration
fee.
(c) The administrative fee rent increase shall not be included as part of the base rent upon
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which future rent increases are based and shall be deleted from the space rent once the
mobile home owner's pro rata share of said administrative fee rent increase has been
collected.
Sec. 32.16. Rent Increase Based upon Capital Improvements - Five Percent
Limitation.
(a). Streamlined Procedure Where Cost is Five Percent or Less of Existing Rent
An application for a rent increase based on the cost of a proposed or completed capital
improvement shall be approved by the Mobile Home Rent Stabilization Program
Administrator if it meets the criteria and conditions of this section. For the purposes of this
section "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. In no event shall any single rent increase or any cumulative rent increases
under this subsection exceed five percent (5%) of any mobile home owner's then existing
rent.
(b) Approval of Capital Improvements When Required for Public Health and Safety
and/or to Comply with Federal, State, and Local Law.
A capital improvement shall be approved by the Rent Stabilization Program Administrator
upon a satisfactory showing by the mobile home park owner that the improvement is
required to:
1. Maintain the common facilities and other areas of the park in a safe and sanitary
condition; or
2. Comply with the law or an administrative regulation.
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(c) Amortization. Capital Improvement rent increases permitted under this section shall
be amortized over the useful life of the improvement as set forth in Internal Revenue class
life tables then in effect, unless the Mobile Home Rent Stabilization Administrator in
his/her discretion determines that the use of such tables is unreasonable under the
circumstances.
(d) Apportionment. Capital Improvement rent increases shall be apportioned equally
among all spaces in the mobile home park affected thereby and shall be payable monthly,
and shall be set forth by the park owner as a separate item from the space rent. The
increase shall remain in effect only until the cost of the improvement, plus reasonable
costs of financing as set forth above, have been fully recovered.
(e) Contents of the Application. The application for the cost of a completed capital
improvement or the estimated cost of a proposed capital improvement shall contain:
1. A description of the capital improvement;
2. A copy of all estimates, contracts, bills, invoices, canceled checks and other
documentation reasonably necessary to establish the cost of the capital improvement and
the reasonable cost of financing the capital improvement.
(f) A petition by an affected residents of a mobile home park, as allowed by Section 32.19,
shall, as to this section, be limited to challenging the increase for a capital improvement
only on the basis that it does not meet the criteria established in this section.
(g) Nothing in this section shall preclude a mobile home park owner from foregoing the
right to seek a rent increase under this section and instead applying for a major rent
increase, including applying for a major increase based on capital improvement
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expenditures that would otherwise result in a rent increase in excess of five percent of the
mobile home resident's then existing rent.
(h) No rent increase for a proposed capital improvement may be collected until the mobile
home park owner provides proof to the Administrator that the improvement has been
completed.
Sec. 32.17. Notice to Residents. A notice of rent increase given by a mobile home park
owner pursuant to this Article shall be given in writing at least ninety (90) days before any
rent increase is to take effect
Sec. 32.18. Filing of a Petition by a Mobile Home Park Resident
(a) Any resident of a mobile home park subject to this Ordinance and joined by at least
fifty percent (50%) of the other residents similarly affected, may petition for a
determination whether a proposed or actual action by the mobile affecting such resident(s)
is within the terms of Section 32.16. Such petition shall be on a form prescribed by the
Mobile Home Rent Stabilization Administrator. In the absence of such designated form,
the petition shall contain the name, address and telephone number, if known, of the mobile
home park owner or other person authorized to represent the owner of the mobile home
park, a brief statement of the facts giving rise to the petition and a statement that a copy of
the petition has been personally served or mailed to the owner or other person authorized
to accept and receive notices.
(b) A petition must be filed within 60 days of notice being given by the park owner or
within 90 days of the action actually taken by the park owner when no written notice
preceded the action.
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(c) Upon receipt of the petition, the Administrator shall determine whether the petition
contains the minimum number of signatures required. Thereafter, the Administrator shall
notify, in writing, the park owner and the residents of the results of that determination.
(d) Informal Hearing. The Administrator shall conduct an informal hearing in an attempt
to resolve the matter. In making his/her recommendation(s), the Administrator may
consider all relevant factors including those listed in this Ordinance.
1. The hearing may be attended by no more than two representatives from the affected
residents and two representatives from the park owner. Attorneys shall not be present at
the informal hearing(s) unless agreed to by both sides except in a case where the park
owner or petitioning resident(s) is an attorney in which case the other party may be
accompanied by its own attorney.
2. The Administrator shall submit his/her final recommendations in written form to both
sides. Any agreements reached by the parties shall be reduced to writing and be signed by
them and the Administrator.
3. Any party to the informal hearing conducted by the Administrator shall be entitled to
appeal the decision to the Mobile Home Hearing Board. The conduct of proceedings on
appeal shall be as described in Section 32.27 herein.
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ARTICLE V. MAJOR RENT INCREASES
An increase in space rent payable for any mobile home space within any twelve-month
period more than the amounts otherwise permitted herein, whether for a hardship rent
increase, capital improvement costs as to which Section 32.16 herein is inapplicable, or for
other reasons and purposes, and/or a reduction in services without a concurrent decrease in
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space rent shall be considered a major rent increase and is subject to the provisions set
forth in this Article, Article V and other provisions of this chapter.
Sec. 32.19. Notice to Mobile Home Park Residents.
(a) At least ninety (90) days before instituting a major rent adjustment as defined in this
Article, the mobile home park owner shall give written notice of the proposed action to all
affected mobile home residents.
(b) Whenever the owner serves such a notice of rent increase, owner shall at the same time
and in the same manner serve the affected resident with a notice that sets forth all of the
following information:
1. The amount of the rent increase both in dollars and as a percentage of existing rent and
documentation supporting the level of increase desired, including at a minimum: a
summary of the unavoidable increases in maintenance and operating expenses; a statement
of the cost, nature, amortization, and allocation among mobile home spaces of any
substantial rehabilitation or capital improvement; a summary of the increased cost of the
owner's debt service and the date and nature of the sale or refinancing transaction; a
summary of the owner's net operating income of the preceding twenty-four (24) months
and other relevant information that supports the level of rent increase desired;
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2. The identity of all affected residents.
(c) Reduction in Mobile Home Park Service. For a reduction in park service with or
without a decrease in rent, the relevant information to be provided to affected park
residents referred to in Section 32.19(b) hereinabove must include the specific park
services to be reduced and the decrease in park space rent, if any, which will result.
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Sec. 32.20. Notice of Meeting.
(a) Concurrently with providing notice of a rent increase as required in Section 32.19, or
reasonably soon thereafter, the mobile home park owner shall provide at least thirty (30)
days advance written notice of a meeting with the affected residents to discuss the
proposed increase. This notice shall include the time and date of the meeting, which time
must be as convenient for as many affected residents as possible, the exact location of the
meeting, which shall be at a location within the mobile home park. The rent increase not
become effective until forty-five (45) days after the commencement of this meeting.
Sec. 32.21. Notice to Mobile Home Rent Stabilization Administrator.
The mobile home park owner shall serve a copy of the notice of rent increase described in
Section 32.19 and a list of names and addresses of all persons receiving notice upon the
Mobile Home Rent Stabilization Administrator at least seventy-five (75) days prior to the
effective date of the rate increase.
Sec. 32.22. Manner of Giving Notice.
Notices of rent increases and meetings required by this chapter shall be given personally to
the affected resident, deposited in the United States mail, postage prepaid, addressed to the
resident at his or her site within the mobile home park or by other manner agreed upon in
writing by the resident and the park owner.
Sec. 32.23. Implementation. Following the provision of notice in substantial compliance
with the requirements of this Article and the holding of the meeting required herein, and
the provision of any and all notices required by state law, the rent increase may be
implemented unless a timely petition substantially in compliance with the requirements
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provided in Article VI herein has been filed. Should such a petition be so filed, the
collection of increased rent shall be stayed pending the review proceedings provided
herein.
ARTICLE VI. REVIEW HEARING PROCEDURES
Sec. 32.24. Petition for Review.
(a) Right to Petition. Mobile home residents affected by a major rent increase as
described herein shall have the right to file a petition for review of any such increase with
the Mobile Home Rent Stabilization Administrator in the Lake County _[name of
department]_ Department at 255 North Forbes Street, Lakeport, California. 95453.
(b) The petition must be signed by more than fifty (50) percent of the mobile home
residents affected by the rent increase. For purposes of determining the sufficiency of the
petition, only one resident per occupied space shall be counted.
(c) The petition must include the name and address of the mobile home park, the names
and addresses of the park owners, and the name of the petitioners' legal representative or
the affected resident who shall act as the representative of the petitioners.
(d) Petition Form Required. Such petition shall be on a form prescribed by the Mobile
Home Rent Stabilization Administrator.
(e) Petition Content. The petition shall include a brief summary of the amount of the
disputed rent increase. For a petition challenging a reduction in service without a
concurrent decrease in rent, the petition must describe the service that has been reduced,
the date the reduction occurred or was discovered, and the claimed amount that the space
rent should be decreased as a result of the reduction in service. The petition should
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include all documentation which the petitioners believe is relevant to the rate increase
under review.
(f) Time for Filing. The petition shall be filed no later than thirty (30) days after the
effective date of the rent increase.
(g) Verification of Petition. Within twenty (20) days after the petition is submitted, the
Mobile Home Rent Stabilization Administrator shall determine if the petition is complete
and verify that the petition has the required number of signatures.
(h) Notification of Mobile Home Park Owner. Upon verifying the petition, the Mobile
Home Rent Stabilization Administrator shall send written notice to the park owner that a
petition has been received and determined to be sufficient.
Sec. 32.25. Dispute Resolution.
Within fifteen (15) days of having sent notification to the mobile home park owner as
described in Section 32.24 (h), the Mobile Home Rent Stabilization Administrator shall
convene a meeting with the park owner and the petitioners' representative for purposes of
mediating the dispute. If no resolution is achieved through this process within forty-five
(45) days of having first convened a meeting, the Administrator shall notify the Mobile
Home Hearing Board that it will convene for a hearing on the petition.
Sec. 32.26. Hearing Before the Mobile Home Hearing Board.
(a) The Mobile Home Hearing Board shall commence an administrative hearing on the
petition within not less than thirty (30) nor more than sixty (60) days after the date of
notification from the Mobile Home Rent Stabilization Administrator described in Section
32.25.
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(b) The hearing shall be completed within fifteen (15) days after it is commenced. These
time deadlines may be extended if the Hearing Board finds that there is good cause to
commence and/or complete the hearing at a later date.
(b) The Hearing Board may schedule the hearing during the normal business hours of the
County unless the park owner or a majority of the residents that are subject to the petition
request that the hearing be scheduled during the evening.
(c) Notice of Hearing. The Mobile Home Rent Stabilization Administrator shall give
written notice of the time, date, and place of the administrative hearing to the park owner
and to the petitioners, by and through their designated representative, at least thirty (30)
days prior to the hearing.
(d) The Hearing Board may order production of such requested documentation, if the
Hearing Board determines the information is relevant to the proceedings.
Sec. 32.27. Conduct of the Hearing.
(a) All hearings held by the board shall be conducted in accordance with the Ralph
M. Brown Act, at Sections 54950 et seq. of the California Government Code.
(b) All interested parties to a hearing may have assistance from an attorney or such other
person as may be designated by the parties in presenting evidence or in setting forth by
argument their positions. All witnesses shall be sworn in and all testimony shall be under
penalty of perjury.
(c) In the event that either the mobile home park owner or the petitioners should fail to
appear at the hearing at the specified time and place, the board may hear and review such
evidence as may be presented, and make such decisions as if all parties had been present.
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(d) The petitioners and the mobile home park owner may offer any relevant evidence and
the formal rules of evidence shall not apply.
(e) The board shall maintain a record of all proceedings by electronic recording. Either the
petitioners or the mobile home park owner will have the right to procure the services of a
court reporter at their own expense to record and transcribe the proceedings.
Sec. 32.28. Standards of Review
(a) In reviewing a petition challenging a major rent increase, the board may consider,
along with all other factors it considers relevant, changes in costs to the mobile home park
owner attributable to an increase or decrease in utility rates, property taxes, insurance,
advertising, variable mortgage interest rates, employee costs, normal repair and
maintenance, and other considerations, including, but not limited to, rehabilitation work,
capital improvements, upgrading and addition of amenities or services, net operating
income and the level of rent necessary to permit a just and reasonable return on the
owner's property.
(b) In reviewing a petition appealing a determination permitting a rent increase based on
capital improvements with a fiver percent (5%) limitation under Section 32.16 herein, the
board may consider only whether the proposed increase meets the criteria established in
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Sec. 32.29. Standards of Review for Rent Increase to Maintain Net Operating
Income.
(a) In addition to the information to be considered enumerated in Section 32.29(a), when
reviewing a space rent increase imposed by a park owner to maintain the owner's net
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operating income from the park, the following definitions and provisions shall apply:
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1. "Net operating income" of a mobile home park means the gross income of the park less
the operating expenses of the park.
2. "Gross income" means the sum of the following:
A. Gross space rents, computed as gross space rental income at one hundred
percent (100%) occupancy; plus
B. Other income generated as a result of the operation of the park, including, but
not limited to, fees for services actually rendered; plus
C. Revenue received by the park owner from the sale of gas and electricity to park
residents where such utilities are billed individually to the park residents by the
park owner; minus
D. Uncollected space rents due to vacancy and bad debts to the extent that the same
are beyond the park owner's control. Uncollected space rents in excess of three
percent (3%) of gross space rent shall be presumed to be unreasonable unless
established otherwise and shall not be included in computing gross income. Where
uncollected space rents must be estimated, the average of the preceding three (3)
years experience shall be used.
3. "Operating expenses" means:
A. Real property taxes and assessments;
B. Utility costs to the extent that they are included in space rent;
C. Management expenses including the compensation of administrative personnel,
including the value of any mobile home space offered as part of compensation for
such services, reasonable and necessary advertising to ensure occupancy only, legal
and accounting services as permitted herein, and other managerial expenses.
Management expenses are presumed to be not more than five percent (5%) of gross
income, unless established otherwise;
D. Normal repair and maintenance expenses for the grounds and common facilities
including but not limited to landscaping, cleaning and repair of equipment and
facilities;
E. Owner-performed labor in operating or maintaining the park. (To be limited to
five percent of gross income unless the Hearing Board finds in a particular case
such a limitation would be unfair.)
F. Operating supplies;
G. Insurance premiums pro-rated over the life of the policy;
H. Taxes, fees, and permits, except as provided in Section 32.14.
I. Capital Improvement Costs;
J. Involuntary Refinancing of Mortgage or Debt Principal.
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(b) All operating expenses must be reasonable. Whenever a particular expense exceeds the
normal industry or other comparable standard, the park owner shall bear the burden of
proving the reasonableness of the expense.
(c) Presumption of Fair Base Year Net Operating Income. A mobile home park owner
has the right to obtain a net operating income equal to the base year net operating income
adjusted by the percentage increase in the CPI since the base year. It shall be presumed
that the net operating income received by the mobile home park owner in the base year,
provided the park owner with a fair and reasonable return.
Sec. 32.30. Standards of Review for Capital Improvement Rent Increases.
(a) In a review of a rent increase fora capital improvement not subject to the streamlined
procedure provided in Section 32.16, and in addition to the information described in
Section 32.28(a), the Hearing Board shall consider:
1. The description of the improvement;
2. Contract documents or bid documents showing the cost or estimated cost of the project.
3. The amortization period to be used;
4. The interest rate to be obtained;
5. The formula used to calculate the pro-rata share of each resident;
6. The monthly cost to each resident in dollars.
Sec. 32.31. Decision of the Board.
(a) The board shall make a final decision no later than twenty days after the conclusion of
its hearing. The board's decision shall be based on the preponderance of the evidence
submitted at the hearing. The decision shall be based on findings. All parties to the hearing
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shall be advised by mail of the board's decision and findings.
(b) Pursuant to its findings, the board may:
1. Permit the requested rent increase to become effective, in whole or in part, or
2. Deny the requested rent increase, or
3. Permit or deny, in whole or in part, requested reductions of or charges for, facilities or
services.
(c) Any decision of the board shall be final unless, within fifteen days after mailing of the
decision, an appeal is filed with the Board of Supervisors pursuant to the terms and
conditions provided in Section 32.32.
See. 32.32. Appeal.
(a) Any appeal from a decision of the Mobile Home Hearing Board shall be filed with the
Clerk of the Board of Supervisors. The date for consideration of the appeal shall be set by
the clerk no less than ten days nor more than thirty days after the expiration date for filing
of an appeal. Notice of the date, time and place shall be given by the clerk to the
petitioners by and through their designated representative, and the mobile home park
owner.
(b) At the time set for consideration of the appeal, the Board of Supervisors shall review
and consider the record of board hearing and the decision and findings of the Mobile
Horne Hearing Board. After review and consideration, the Board of Supervisors may
either:
1. Determine that a further hearing shall be held, to be conducted before the Board of
Supervisors at the second regular meeting of the Board of Supervisors following the
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determination that such further hearing is necessary; or
2. Ratify and adopt the decision and findings of the Mobile Home Hearing Board.
(c) If a further hearing is conducted, the Board of Supervisors may, upon conclusion of the
hearing, and in no event more than forty-five days thereafter, modify, reverse or uphold the
decision of the board, and shall make the findings in support thereof.
(d) Notice of Decision. The Clerk of the Board of Supervisors shall mail copies of the
decision to the petitioners, by and through their designated representative, and the mobile
home park owner no later than ten (10) days after the approval of the decision by the
Board of Supervisors.
ARTICLE VII. OBLIGATIONS OF THE MOBILE HOME PARK OWNER TO
PROVIDE INFORMATION
Sec. 32.33. Information to be Supplied by the Mobile Home Park Owner to Residents
and Prospective Residents.
(a) Posting of Ordinance. A copy of the ordinance codified in this chapter shall be posted
in the office of every mobile home park and in the recreation building or clubhouse of
every mobile home park located in the County.
(b) A copy of this ordinance shall be provided to every resident and to prospective
residents of a mobile home park in the County before the resident or prospective resident
agrees to any rental agreement or lease.
Sec. 32.34. Information to be Provided by the Park Owner to Prospective Park
Purchasers.
A copy of this Ordinance shall be shown to every prospective purchaser of a mobile home
park in the unincorporated areas of the County before the prospective purchaser enters
into an agreement to purchase the park.
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Sec. 32.35. Annual Registration and Other Notices Required from Owner.
(a) Due Date. Every mobile home park owner shall file an annual registration statement on
a form provided by the Mobile Home Rent Stabilization Administrator no later than
February 1 st of each year.
(b) Contents of Registration Form. The initial registration shall include the name(s),
business address(es), and 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 spaces within the park; a rent schedule reflecting space rents within the park;
a listing of all other charges, including utilities not included in space rent, paid by mobile
home owners within the park and the approximate amount of each such charge; the name
and address to which all required notices and correspondence may be sent, and other
information required by the Mobile Home Rent Stabilization Administrator.
(c) Certification of Registration Forms. All registration forms and any documentation
accompanying any registration forms shall contain an affidavit or declaration, signed by
the park owner or a designated agent, with his/her signature notarized, certifying that the
information contained therein is true, correct, and complete.
(d) Notice of Sale of a Park. Upon the sale or transfer of a mobile home park, the seller or
transferor shall notify the Mobile Home Rent Stabilization Administrator of the sale or
transfer and of the name and address of the buyer or transferee. Within ten (10) days
following the sale or transfer of a mobile home park, the buyer or transferee shall register
with the Mobile Home Rent Stabilization Administrator by providing the information
required by this subsection.
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ARTICLE VIII. FEES AND PENALTIES.
Sec. 32.36. Administrative Fees.
(a) Administrative fees imposed for the purpose of reimbursement to the County's general
fund the costs of providing and administering the administrative hearing process and other
services established by this chapter may be adopted pursuant to Board resolution.
(b) The Mobile Home Rent Stabilization Administrator shall provide the Board of
Supervisors with a recommendation regarding the amount of the fee that is necessary to
recover the costs of administering this chapter as part of the County's annual budget
process. The amount of the fee shall be set forth in the schedule of fees adopted by
resolution of the County of Lake. The fee shall not exceed the amount found by the Board
of Supervisors to be necessary to recover the costs of administering this chapter, and the
Board's finding in this regard shall be final.
(c) The mobile home park owner shall pay any applicable fee to the County for all of the
owner's rental spaces which are subject to this chapter on or before January 31st of each
year.
(d) The mobile home park owner may pass the amount of the administrative fee to the
resident of each space which is subject to the fee as provided in Section 32.15 herein.
(e) Any mobile home park owner who fails or refuses to pay any fee required under this
chapter for a period of thirty (30) days from and after the date such fee is due shall, in
addition to the fee, pay a penalty of twenty (20) percent of the amount of the unpaid fee.
The penalty shall be increased to fifty (50) percent if the fee is not paid within ninety (90)
days after the due date. A park owner must be provided with a thirty (30) day notice prior
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to becoming subject the penalties set forth in this subsection. The notice shall be delivered
by certified U.S. mail, postage prepaid and return receipt requested; U.S. mail delivery
confirmation; U.S. mail signature confirmation; or such other delivery method that is
reasonably calculated to provide actual notice to the park owner.
Sec. 32.37. Penalties and Remedies. In addition to those penalties and remedies set forth
elsewhere in this chapter, the following remedies shall apply:
Any mobile home park owner who demands, accepts, receives or retains any money as
rent from a mobile home park resident to which the owner is not entitled under the
provisions of this chapter shall be liable to the resident for any actual damages, attorney's
fees and costs incurred by the resident as a consequence thereof plus a penalty in the sum
of three (3) times the amount of money the owner accepted, received or retained in
violation of the provisions of this article or five hundred dollars ($500.00), whichever is
greater.
Sec.32.38. Rights of Affected Residents Reserved. This chapter shall not be construed
to limit or curtail any other action or proceeding which may be pursued by an affected
mobile home park resident against an owner before any court or other body having
jurisdiction thereof.
Sec. 32.39. Authority of the Board of Supervisors to Bring Civil Action to Compel
Compliance.
In addition to any other remedy available by law, the Board of Supervisors may institute a
civil action to compel compliance with this chapter."
SECTION TWO: The Board of Supervisors shall review the effectiveness of this chapter in
addressing the problems giving rise to its enactment at least one (1) year from its enactment.
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Notice of the time and place of the board of supervisors' review shall be published at least ten
(10) days prior to said date in a newspaper of general circulation in the County of Lake.
SECTION THREE: If any provision or clause of this chapter or application thereof to any
person or circumstances is held invalid, such invalidity shall not affect other provisions or
applications of this chapter which can be given effect without the invalid provision or application,
and to this end the provisions of this chapter are declared to be severable and are intended to have
independent validity. The Board of Supervisors declares that it would have passed the Mobile
Home Rent Stabilization Program codified in this chapter and each section, subsection, clause, or
phrase hereof, irrespective of the fact that any one (1) or more of the sections, subsections,
sentences, clauses, or phrases hereof be declared invalid or unconstitutional.
SECTION FOUR: All ordinances or parts of ordinances in conflict herewith are hereby
repealed to the extent of such conflict and no further.
SECTION FIVE: This Ordinance shall take effect on the of , 2009,
and within fifteen (15) days after adoption of the ordinance, the Clerk to the Board of
Supervisors shall publish a summary of the Ordinance with the names of those supervisors
voting for and against the ordinance and the Clerk shall post in the office of the Clerk to the
Board of Supervisors a certified copy of the full text of the adopted ordinance along with the
names of those supervisors voting for and against the Ordinance.
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day of.
2009.
AYES:
NOES:
, 2009, and passed by the following vote on the day of ,
ABSENT OR NOT VOTING:
COUNTY OF LAKE
Chair Board of Supervisors
ATTEST: KELLY F. COX
Clerk of the Board of Supervisors
APPROVED AS TO FORM:
ANITA L. GRANT
By: _
Deputy
By:
Ordinance Adding to Chapter 32 to the Lake County Code
Establishing a Mobile Home Rent Stabilization Program
The Foregoing Ordinance was introduced before the Board of Supervisors on the
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ATTACHMENT--~f
THIS AGREEMENT WILL BE EXEMPT FROM ANY ORDINANCE, RULE,
REGULATION OR INITIATIVE MEASURE ADOPTED BY ANY LOCAL
GOVERNMENTAL ENTITY WHICH ESTABLISHES A MAXIMUM AMOUNT
THAT A LANDLORD MAY CHARGE A TENANT FOR RENT.
INSERT PARK NAME Manufactured Home Community (hereinafter "Park") and those
persons (collectively, "Resident") listed on the last page of this document (hereinafter
"Supplement") agree to the terms and conditions set forth herein which amend and
supplement the Rental Agreement (hereinafter "Agreement") for Homesite entered
into by and between the parties on ,
ACKNOWLEDGEMENT: Resident acknowledges and agrees that this Supplement, in
addition to other modifications, modifies the provisions of the Agreement regarding the
payment of rent, the manner in which rent increases are computed, and the term of the
Agreement. Accordingly, Resident acknowledges and agrees that the Agreement shall be
deemed to immediately follow this Supplement, pursuant to Section 798.17 of the
California Civil Code, and the Agreement shall remain in full force and effect subject to
the following modifications:
SPECIFIC INFORMATION.
1.1 Term. The tenancy created under the Agreement shall be changed from a
month-to-month tenancy to the period designated below (unless sooner terminated in
accordance with the terms of this Supplement, the Agreement, California Civil Code or
other applicable law).
Five years (60 month) and shall commence on , and end on
9
Seven years (84 months) and shall commence on , and end on
Ten years (120 months) and shall commence on , and end on
Other:
and end on ,
1.2 Initial Base Rent:
1.3 Anniversary Date:
item l Od 1 040109
and shall commence on 11
per month.
("Anniversary Date")
PARK NAME
3/27/2009
1.4 Termination by Resident. Resident may elect to terminate the
Agreement and this Supplement on sixty (60) days' prior written notice to
Park pursuant to paragraph 3 below.
2. RENT. Resident shall pay Base Rent in advance to Park on the first day of each
month, without deduction, offset, eliminated abatement or rebate.
2.1 First Anniversary Date. The Initial Base Rent specified in paragraph 1.2
shall remain in effect until the first Anniversary Date, whereupon the Cost
of Living adjustments shall commence pursuant to paragraph 2.2 below.
2.2 Cost of Diving Adjustments. Commencing with the first Anniversary
Date and on each Anniversary Date thereafter, the Base Rent then in effect
shall be increased by an amount equal to the percentage increase in the
Consumer Price Index for All Urban Consumers for the San Francisco-
Oakland-San Jose California Area (1982-84=100) as published by the
United States Department of Labor, Bureau of Labor Statistics during the
twelve (12) month period ending at least one (1) month (but not more than
four (4) months) prior to the month in which notice of increase if given.
Such increase shall be made upon ninety (90) days' prior written notice.
However, the cost-of-living adjustment shall not be less than three percent
(3%) or greater than seven percent (7%). In the event of the foregoing
Consumer Price Index is discontinued or revised, another governmental
index then in existence shall be selected by Park and used to obtain
substantially the same result.
2.3 Formula Adjustments to Base Rent. At any time after the initial twelve
(12) months of this Agreement, the Base Rent then in effect shall be
subject to formula adjustments.
2.3.1 Notice. A formula adjustment to Base Rent can be made by Park
only after the giving of at least ninety (90) days' prior written
notice. If a formula adjustment has been made for any of the items
listed in subparagraph 2.3.4 below, then no additional increase for
such item shall be implemented for twelve (12) months from the
date of the previous noticed increase.
2.3.2 Comparison Period. For each formula adjustment set forth below,
the "Comparison Period" is the twelve (12) month period ending at
least one (1) month (but not more than four (4) moths) prior to the
month in which the rent increase notice is given or, at the election
of the Park, the twelve (12) month period ending in December of
the year prior to the month in which the rent increase notice is
given. The "Base "Period" is the twelve (12) month period
immediately preceding the Comparison Period.
item10d1_040109 2 PARK NAME
3/27/2009
2.3.3 Annualized. It the amount for any item subject to the formula
adjustments listed in subparagraph 2.3.4 has been instituted or
increased at any time during the Comparison Period, such amounts
may, at the election of Park, be annualized and be considered on a
full twelve (12) month basis for the Comparison Period.
2.3.4 Formula adjustments are as follows:
(a) Property Taxes. If the property taxes for the
Comparison Period exceeds the property taxes for the Base Period by more than two
percent (2%), the Base Rent then in effect shall be increased by the amount of the
increase in excess of two percent (2%), divided by twelve (12) and divided by the number
of spaces in the Park. Property taxes includes, without limitation, general and special real
estate taxes, personal property taxes, ad valorem taxes, bonds, fees, user fees, charges for
or on offsite or onsite improvements, or any assessments or charges in lieu of real
property taxes), any tax or excise on rents or any such other tax, however described,
which is levied or assessed against Park as a direct substitution in whole or in part for any
real property taxes. In the event Resident's Mobilehome, appurtenances and/or accessory
structures shall be assessed and taxed with Park's real property, such tax assessed is
included in property taxes. Park may estimate the amount of such taxes due and impound
from Resident, on a monthly basis, Resident's estimated tax obligation pursuant to this
paragraph. Park shall disclose exact amount of taxes due.
(b) Government Required Services. If the costs for
Government Required Services on an item-by-item basis for the Comparison Period
exceed the cost for any one or more Government Required Services compared to the Base
Period, the Base Rent then in effect shall be increased by the amount of all such increased
costs, divided by twelve (12) and divided by the number of spaces in the Park. The term
"Government Required Services" includes, without limitation, any existing, new,
additional or changed service or facility which Park is required by the government to
provide, or which is economically imprudent not to provide due to governmental
regulation, fees, bonds, charges and other related costs and expenses for water, sewer,
hook-up to municipal sewer or local water company, trash pickup and trash bin rental and
utilities provided by Park. Utilities separately billed by Park to Resident are excluded
from this definition.
(c) Capital Improvements and Capital Replacements.
The Base Rent then in effect shall be increased by an amount equal to the total cost of
Capital Improvements and Capital Replacements made by the Park during the
Comparison Period, amortized in accordance to Internal Revenue Service Depreciation
Schedule, divided by twelve (12) and divided by the number of spaces in the park.
Capital Improvements and Replacements are estimated to have a useful life of at least one
(1) year, and Park shall be entitled to received interest on the unamortized balances
calculated by utilizing a prime + two percent (2%) interest factor.
item l Od 1_040109 3 PARK NAME
3/27/2009
(i) Capital Improvement Defined. The term
"Capital Improvement" refers to any thing that is new and does not currently exist in the
Park, such as the construction of a new swimming pool where none existed before.
(ii) Capital Replacement Defined. The term
"Capital Replacement" refers to replacement of any existing thing in the Park. Examples
of Capital Replacements are: a new roof to replace the old roof on the existing clubhouse;
and a replacement pump and filter for the swimming pool. Examples of repairs which are
Capital Replacements, but which are excluded from the formula adjustment are: ordinary
upkeep, e.g., repairing the clubhouse roof or repairing the pool pump and filter,
maintaining landscaping and ordinary expenses which may be deducted in accordance
with Internal Revenue Service regulations and federal tax and case law.
(iii) Approval. No individual capital
improvement which would cost more than $10,000 and which would result in an increase
in Base Rent then in effect shall be made without the approval of the Park and the
approval, by written ballot, of a majority (more than 50%) of Residents (one vote per
Homesite). In the event that a capital improvement is proposed by the Park, but is not
approved by a majority of Residents, then Resident's rent shall not be increased for such
capital improvement.
(d) Insurance. If the costs for insurance to the Park
during the Comparison Period exceed the costs for insurance during the Base Period, the
Base Rent in effect shall be increased by the amount of excess cost, divided by twelve
(12) and divided by the number of spaces in the Park. The term "insurance" includes all
amounts paid by the Park for insurance with respect to the Park, including, without
limitation, insurance for any loss, damage or injury to property or person, including fire,
earthquake, flood, vandalism, burglary, or theft, or workers' compensation insurance.
2.3.5 Increases Comprise Rent. The Base Rent increases in
paragraphs 2.2 and 2.3 comprise rent. No delay in the exercise of any right of Park to
institute or increase any formula adjustment to Base Rent listed hereinabove shall be
construed as a waiver or shall impair any right of Park to institute or increase such
formula adjustment.
2.4 Disclosure. All billings and other documentation relating to calculation
of an adjustment, pass through, or rent increase shall be disclosed to a homeowner within
a reasonable time after request.
2.5 Adjustment Upon Expiration. Notwithstanding paragraphs 2.2 and
2.3, the Base Rent shall be increased either to (1) the highest space rent in the Park, or (2)
by ten percent (10%) of the then existing base rent, whichever amount is higher,
commencing with the next to last month of this Supplement, unless this Supplement is
renewed pursuant to paragraph 6 entitled "Extension or Renewal."
item10d1_040109 4 PARK NAME
3/27/2009
3.0 TERMINATION BY RESIDENT. Resident may elect to terminate the
Agreement and this Supplement on sixty (60) days' prior written notice to Park if one of
the following occurs:
3.1 Removal of Mobilehome. All persons occupying the Homesite rented to
Resident by the Agreement and this Supplement terminate their tenancy as to said
Homesite and remove Resident's Mobilehome, appurtenances and accessory structures
from the Park. In such event, the Homesite shall revert to Park's control, and Park may
lease or rent the Homesite to any parry on any terms Park chooses.
3.2 Sale of Mobilehome. All persons occupying the Homesite rented to
Resident by the Agreement and this Supplement terminate their tenancy as to said
Homesite and sell Resident's mobilehome to another party who has been approved by
Park for tenancy in the Park in accordance with the terms set forth in the paragraph
entitled "Approval of Purchaser." In such event, the Agreement and this Supplement
may, be assigned to the purchaser in accordance with the terms of this Supplement.
4. APPROVAL. OF PURCHASER. Resident may sell Resident's Mobilehome at
any time pursuant to the Mobilehome Residency Law and other applicable law. If the
prospective purchaser of the Mobilehome intends for the Mobilehome to remain in the
Park, said purchaser must do the following before occupying the Mobilehome: (a)
complete an application for tenancy (which may include a fee for obtaining a credit
report); (b) be accepted by Park; and (c) execute an assignment of Resident's interest in
the Agreement and this Supplement or a new rental agreement, the Park's Rules and
Regulations, and other residency documents. If the purchaser fails to execute an
assignment or a new agreement, such purchaser shall have no rights of tenancy. The
residency documents signed by the prospective purchaser may be different in their terms
and provisions than such residency documents now in effect so long as residency
documents are consistent with the terms of this agreement
5. ASSUMPTION OF AGREEMENT. After the initial twelve months of this
Supplement, upon the sale of Resident's Mobilehome, Resident shall assign and the
purchaser shall assume Resident's interest in the Agreement and this Supplement. Park
retains the option, upon such assumption and transfer, to increase the adjusted Base Rent
(the Base Rent then in effect for the month immediately preceding the effective date of
the assumption or transfer) either (1) to the highest space rent in the Park for a
comparable site/space, or (2) by an amount not exceeding ten percent (10%) of the then
existing Base Rent, whichever amount is higher. Said increase shall be in addition to any
other rental adjustments provided for in this Supplement.
6. EXTENSION OR RENEWAL. As long as this Agreement is in full force
and effect and Resident is not in default of any term or condition hereof, Resident shall
have the right to renew the Agreement and this Supplement for two (2) additional terms
of sixty (60) months by giving written notice to other parry of such election at least sixty
(60) days prior to the expiration of the term. Park shall provide resident with at least six
(6) and no more than nine (9) months notice of Resident's right to renew.
item10d1_040109 5 PARK NAME
3/27/2009
7. MEGAN'S LAW DISCLOSURE. NOTICE. : Pursuant to Section 290.46
of the Penal Code, information about specified sex offenders is made available to the
public via an internet Web site maintained by the Department of Justice at
www.meganslaw.ca.gov. Depending on the offender's criminal history, this information
will include either the address at which the offender resides or the community of
residence and Zip Code in which he or she resides.
8. PRIOR AGREEMENTS. This Supplement supersedes all prior agreements
regarding the terms of tenancy referenced herein. In the event of a conflict between the
terms of the Agreement and the terms of this Supplement, the terms of this Supplement
shall control.
9. ACKNOWLEDGMENTS. Resident represents, acknowledges and agrees as
follows:
9.1 Personal Residence. Resident is entering into this Supplement for the
personal and actual residence of Resident.
9.2 Acceptance Period. Resident has sixty (60) calendar days from and after
the date Park submits this Supplement to Resident to accept or reject it.
9.3 Cancellation Period. Resident may cancel this Supplement within
seventy-two (72) hours after executing it, by delivering a written notice to the Park
stating Resident's election to cancel.
item10d1_040109 6 PARK NAME
3/27/2009
10. ATTORNEYS FEES. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorney's fees, costs, and necessary disbursements in addition to any other
relief to which such party may be entitled.
THE PERSONS whose signatures appear below have reviewed, understand, and agree
to be bound by this Supplement.
INSERT PA NAME
Dated:
By:
RESIDENT(S)
Dated:
Time:
Dated:
Time:
item l Od 1 040109
Authorized Agent
Signature
Print Name
Signature
Print Name
PARK NAME
3/27/2009
aTrAC t „
Chapter 2.50 MOBILE HOME RENT REVIEW
Sections:
2.50.010 Purpose.
2.50.020 Definitions.
2.50.030 Applicability.
2.50.040 Rent review commission.
2.50.050 Powers of the commission.
2.50.060 Initiation of commission review and hearing process.
2.50.070 Disallowed increases.
2.50.080 Enforcement.
2.50.010 Purpose.
There is presently within the city a shortage within mobile home parks of
desirable spaces for the location of mobile homes. Because of the high cost of moving
mobile homes the potential for damage resulting therefrom, the requirements relating to
the installation of mobile homes, including permits hookup fees, landscaping and site
preparation, the lack of alterative home sites for mobile home residents, and the
substantial investment of mobile home owners in such homes, the city council finds and
declares it necessary to protect the owners and occupiers of mobile homes from
unreasonable space rent increases, while at the same time recognizing, with
reservations, the need of park owners to receive a fair return on their investment and
rental increases sufficient to cover the increased cost of repairs, maintenance,
insurance, taxes, upkeep and additional amenities, and governmental assessments.
(Ord. 1441 § 1 (part), 1982).
2.50.020 Definitions.
Words used in this chapter shall have the meaning ascribed to them in this
section.
A. "Commission" means the mobile home rent review commission established by
Section 1.50.040 of this chapter.
B. "Members" means commissioners of the mobile home rent review commission.
C. "Mobile home park" is an area of land where two or more mobile home sites are
rented, or held out for rent, to accommodate mobile homes used for human habitation.
D. "Mobile home" is a structure designed for human habitation and for being moved on
a street or highway under permit.
E. "Mobile home park owner" or "owner" means the owner, lessor, operator or manager
of a mobile home park within the purview of this chapter.
F. "Mobile home tenant" or "tenant" means any person or persons entitled to occupy a
mobile home dwelling unit pursuant to ownership thereof or a rental or lease
arrangement with the owner thereof.
G. "Space rent" or "rent" means the consideration, including any bonus, benefits or
gratuity demanded or received in connection with the use and occupancy of a mobile
home space, or site, in a mobile home park, or for the transfer of a lease for a park
space or site, services and amenities, subletting and security deposits, but exclusive of
any amounts paid for the use of the mobile home dwelling unit.
(Ord. 1441 § 1 (part), 1982).
2.50.030 Applicability.
The provisions of this chapter shall not apply to a mobile home park which
contains fewer than twenty-five (25) spaces or sites.
(Ord. 1441 § 1 (part), 1982).
2.50.040 Rent review commission.
A. Pursuant to Section 700 of the Charter of the City, there is created within the city a
mobile home rent review commission consisting of seven (7) members to be appointed
by the city council.
B. Two members shall be mobile home tenants and shall be selected by the city council
from a list of no more than five (5) applicants supplied through a committee of Merced
City mobile home tenants, which committee shall include two (2) members from at least
two (2) active Merced City mobile home parks.
C. Two (2) members shall be mobile home park owners, operators or managers, and
shall be selected by the city council from a list of no more than five (5) applicants whose
names have been agreed upon by no less than two Merced City mobile home park
owners, operators or managers.
D. The fifth, sixth, and seventh members shall be neither mobile home tenants nor
mobile home owners, operators or managers, or any person holding a financial interest
in rental property. They shall be selected by the city council from a list of applicants at
large. All members shall be full-time residents of the city.
One alternate shall be appointed in each classification for subsections B, C, and
D, to serve when needed.
E. Within ten (10) days after having taken the oath of office, the commission shall
select a chairman from the members at large, shall serve at the pleasure of the
commission.
(Ord. 1441 § 1 (part). 1982).
2.50.050 Powers of the commission.
Within the limitations provided by law, the commission shall have the following
powers:
A. To meet from time to time as requested by the city manager, or upon the filing of a
petition, and to utilize city offices and/or facilities as needed;
B. To receive, investigate, hold hearings on, and pass upon the petitions of mobile
home tenants as set forth in this chapter;
C. To make or conduct such independent hearings or investigations as may be
appropriate to obtain such information as is necessary to carry out their duties;
D. To adjust rents either upward or downward upon completion of their hearings and
investigations;
E. To render, at least semiannually, a comprehensive written report to the city council
concerning their activities, rulings, actions, results of hearings and all other matters
pertinent to this chapter which may be of interest to the city council;
F. To adopt, promulgate, amend, and rescind administrative rules to effect the
purposes and policies of this chapter;
G. To maintain and keep at City Hall mobile home rent review hearing files and dockets
listing the time, date, and place of hearings, the parties involved, the addresses involved
and the final disposition of the petition;
H. To assess such amounts of money against the petitioners and respondent upon the
conclusion of a hearing as may be necessary to compensate the city for staff time and
other costs incurred. Such assessment shall not exceed three hundred dollars ($300.00)
each from the petitioners and the respondent.
(Ord. 1441 § 1 (part), 1982).
2.50.060 Initiation of commission review and hearing process.
A. Upon the receipt of a written petition signed by tenants representing fifty-one (51)
percent or more of the physically occupied spaces, not including spaces occupied by
management personnel, of any mobile home park containing twenty-five (25) or more
spaces, who have been subjected to a rent increase within six (6) months prior to, or at
any time subsequent to, the enactment of this chapter, the commission shall hold a
hearing no sooner than ten (10) days and no later than thirty (30) days at a place and
time to be set by the commission, to determine whether or not the rental increase is so
great as to be unconscionable or an unreasonable increase. A reasonable continuance
may be granted if stipulated to by both parties or at the commission's discretion.
B. The petition shall be accompanied by a cash deposit in the sum of three hundred
dollars ($300.00), all or any part of which may be assessed against the petitioners
pursuant to Section 2.50.050(h). The balance, if any, shall be refunded upon the
conclusion of the hearing and submission of findings by the commission.
C. Upon receipt of the petition, the commission shall notify the park owner, operator
and manager, in writing, of the petition and shall require from the respondents a like
cash deposit in the sum of three hundred dollars ($300.00), all or part of which may be
assessed against the respondents for costs pursuant to Section 2.50.050(h). The
balance, if any, shall be refunded upon the conclusion of the hearing and submission of
findings by the commission.
In the event respondents fail to post the cash deposit not less than three (3) days
prior to the hearing date set by the commission, there shall operate at that hearing a
conclusive presumption than any increase in rent sought by the respondents is
unreasonable.
D. All rent review hearings shall be open to the public.
E. All parties to a hearing may have assistance in presenting evidence or in setting
forth by argument their position from an attorney or such other person as may be
designated by such party. All costs incurred for such assistance shall be paid by the
party requesting the assistance, and shall not be included as any part of the assessment
defined in Section 2.50.050(h).
F. In the event that either the petitioner or the respondent should fail to appear at the
hearing at the specified time and place, the commission may hear and review such
evidence as may be presented and make such decisions just as if both parties had been
present.
G. The commission shall make a final decision no later than ten (10) days after the
conclusion of its hearing on any petition. No rent adjustment shall be granted unless
supported by the preponderance of evidence submitted at the hearing. The respondents
shall have the initial burden of presenting such evidence. All parties to a hearing shall be
sent a notice of the commission's decision and a copy of the findings upon which the
decision is based.
H. Pursuant to the findings, the commission shall require the mobile home park owner,
operator or manager to:
1. Reduce the rental charge to a rate to be determined by the commission;
2. Continue the rental charge as it existed under the former lease or rental agreement,
written or implied;
3. Increase the rental charge to a rate set by the commission or to the rate requested
by the park owner.
1. Any rental increases which have been collected by a mobile home park owner
pursuant to an increase which is later determined by the commission to have been
excessive shall be returned to the tenants with sixty (60) days after such determination.
J. In evaluating the rent increase proposed or effected by the mobile home park owner,
the commission shall consider the increased operating costs to the owner attributable to,
and including but not limited to, increases in utility rates and property taxes, insurance,
advertising, governmental assessments, capital improvements, incidental services,
normal repair and maintenance, minor upgrading of amenities and services, or the
deletion of amenities or services, plus a fair rate of return on investment.
K. A rent increase which is the subject of a petition for hearing under this chapter may
be denied in full upon submission of substantial evidence that the mobile home park
owner, operator or manager has threatened punitive actions of any kind against any park
tenant or petitioner for seeking relief under this chapter.
L. The conclusions and findings of the commission shall be final and there shall be no
appeal rights to the Merced city council.
M. Should the commission rule that a rent increase is warranted or allow a lesser
increase than requested by the park owner, then no additional increase of rent shall be
allowed by the commission in the mobile home park for a period of six (6) months from
the date of filing of the written petition.
(Ord. 1441 § 1 (part), 1982).
2.50.070 Disallowed increases.
Any rent increases which have been collected by an owner pursuant to an
increase which is the subject of a written petition and which is determined by the
commission to have been excessive shall be either returned to the tenant or credited to
future rental, provided that no increases collected prior to April 5, 1982 shall be returned.
(Ord. 1441§ 1 (part), 1982).
2.50.080 Enforcement.
A. Violation of the provisions of this chapter shall be a misdemeanor.
B. A mobile home tenant(s) may at any time bring an action in the courts of this state
alleging a violation by an owner of any of the terms of this chapter, including, but not
limited to, the existence of a level of rents in excess of that allowed and may seek a
court order requiring compliance with the provisions of this chapter.
C. An owner may at any time file an action in the courts of this state alleging a violation
by a tenant of the provisions of this chapter, and may seek a court order directing
compliance with the provisions hereof.
D. The owner may not enforce a rent increase in excess of that allowed by the
procedures set forth in this chapter. In the event an owner increases rents without
complying with the provisions of this chapter, such an increase shall be deemed null and
void, mobile home tenants shall not be required to pay such increase. Any mobile home
tenant who is sought to be excluded from the park through an unlawful detainer action
brought by the owner to enforce eviction for nonpayment of increase shall have a right to
assert the invalidity of such increase as a defense to the unlawful detainer proceedings.
(Ord. 1441 § 1 (part), 1982).
J F fusing and Urban
Policy
UC Berkeley
Title:
The Curious Institution of Mobile Home Rent Control: An Analysis of Mobile Home Parks in
California
Author:
Mason. Carl, University of California, Berkeley
Quigley. John M., University of California, Berkeley
Publication Date:
06-01-2006
Series:
Workina Papers
Publication Info:
Working Papers, Berkeley Program on Housing and Urban Policy, Institute of Business and
Economic Research, UC Berkeley
Permalink:
http://escholarship.org/uc/item/44d7h9hs
Abstract:
This paper analyzes the implications of rent control as applied to dwellings located in mobile home
parks. This form of regulation differs from apartment rent control in that: it is applied selectively
to a small portion of the housing stock, and; it regulates the site rents paid to the park owner,
not the selling prices of mobile homes. We present a detailed case study of the effects of this
institution in three mobile home parks in different cities and regions in California, documenting the
capitalization of regulatory rules into the selling prices of housing, and raising questions about the
legality as well as the efficacy of the institution.
eScholarship eScholarship provides open access, scholarly publishing
services to the University of California and delivers a dynamic
` - University of California research platform to scholars worldwide.
J
Institute of Fisher Center for
'bon a ri Business and Real Estate and
Economic Research Urban Economics
PROGRAM ON HOUSING
AND URBAN POLICY
WORKING AP SERIES
WORKING PAPER NO. 04-007
THE CURIOUS INSTITUTION O
MOBILE HOME RENT CONTROL:
AN ANALYSIS OF MOBILE
HOME PARKS IN CALIFORNIA
By
Carl Mason
John M. Quigley
June 2006
These papers are preliminary
in nature: their purpose is to
stimulate discussion and
comment. Therefore, they are not
to be cited or quoted in any
publication without the express
permission of the author.
UNIVERSITY OF CALIFORNIA, BERKELEY
The Curious Institution of Mobile Home Rent Control:
An Analysis of Mobile Home Parks in California*
by
Carl Mason
Department of Demography
University of California
Berkeley, CA
carlm(,demo g.berkeley.edu
John M. Quigley
Department of Economics
University of California
Berkeley, CA
ev.edu
June 2006
Abstract
This paper analyzes the implications of rent control as applied to dwellings located in
mobile home parks. This form of regulation differs from apartment rent control in that: it
is applied selectively to a small portion of the housing stock, and; it regulates the site
rents paid to the park owner, not the selling prices of mobile homes. We present a
detailed case study of the effects of this institution in three mobile home parks in
different cities and regions in California, documenting the capitalization of regulatory
rules into the selling prices of housing, and raising questions about the legality as well as
the efficacy of the institution.
Key words: capitalization
JEL codes: L51, K2, L85
*The research on which this paper is based benefited from the comments of Mark Alpert,
James Brabant, David Bradford, William Dahlin, Ellen Kelleher, Paul Regan, Liza
Scrugs, and Benjamin Weinberg. We are grateful for data supplied by Marguerite Nader,
John Neet and Peter Underhill and for the assistance of Sarah Dunn. The usual caveats
apply.
I. Introduction
Although economists disagree on many things, there seems to be a clear
consensus within the dismal science on the effects of rent control: these regulations lead
to reductions in the quality and quantity of housing available to consumers (Alston,
Kearl, and Vaughn, AKV, 1992). Recent scholarly work (e.g., Turner and Malpezzi,
2003) only reinforces the survey of opinions reported by AKV a decade earlier.
Arbitrarily fixing rents below their market-clearing levels throughout a housing market
induces three kinds of economic effects:
First, those tenants who manage to locate and occupy rent-controlled dwelling
units clearly benefit. However, these benefits are typically not distributed to those whom
policy makers intend to help. "Lucky" consumers, disproportionately long-term residents
and those with connections within the local real estate market, benefit at the expense of
new households and immigrants from other regions. (Basu and Emerson, 2000.) The
capricious distribution of benefits means that dwellings are not allocated to those who
value them the most.]
Second, housing suppliers see the economic value of their properties decline, and
they react by reducing maintenance expenditures. Other potential suppliers of housing
invest their capital elsewhere; the incentive to invest capital to produce new housing is
inexorably reduced. Reduced supply makes housing more difficult to obtain, and it
makes alternative housing more costly. These costs are borne diffusely by consumers at
large. When supply is reduced, the individuals who would have resided locally choose
] Glaeser and Luttmer, 1997, 2003, emphasize that these social costs are quite large.
2
other towns or regions. And those who do live locally face higher costs because housing
is scarce.
Third, artificially low rents lead to excess demand for housing, to the hoarding of
rent controlled units, and to reduced household mobility. The popular literature is replete
with anecdotes describing how rent control leads to housing which is hoarded by the
"wrong" people.z
We analyze the economics of rent control when these regulations are applied to
mobile homes or manufactured housing located in mobile home parks. These price
controls are common in several states, notably California (where approximately ninety
cities impose them and where, with few exceptions, it is the only form of local rent
regulation not prohibited by state law). These regulations mandate a base rent which is
often permitted to increase over time according to some formula (typically based on
variations in the consumer price index). Upon vacancy, the park owner may be allowed
to reset the rent to a new base to reflect current market conditions ("vacancy decontrol"),
or the current rent may be continued for the incoming resident ("vacancy control").
In section II below we outline the salient characteristics of these regulations in
comparison with rent control imposed on apartment buildings. The principal issue noted
in section II is the potential for the capitalization of any rent reductions mandated by the
legislation. Section III provides a detailed case study evaluating rent control regulations
z See Glaeser (1996). For example, the journalist Ken Auletta (1979) describes the "Tobacconist
to the World" Nat Sherman who rented a six room apartment on Central Park West at the
controlled rent of $335 a month. Sherman said of the apartment, "it happens to be used so little
that I think [the rent] is fair." This choice dwelling was allocated to someone who valued it so
little that it was worth no more to him than its low regulated cost.
3
in three mobile home parks in three different cities and regions in California. Section IV
is a brief conclusion.
H. Apartment Rent Control and Mobile Home Rent Control
There are two important differences in the institution of rent control when it is
selectively applied to manufactured housing in mobile home parks rather than
apartments.
First, the rent control regulations are imposed on only a small portion of the local
housing market, namely those dwellings in mobile home parks. Prices in the larger
housing market are set by supply and demand, not by regulation, and units in mobile
home parks compete with apartments, condominiums, and owner-occupied dwellings
whose prices are unregulated. This distinction is crucial in evaluating the economic
consequences of the regulations.
Second, the form of the price control differs between apartment regulation and
mobile home regulation, reflecting the divided ownership of mobile home living space.
The owner of the dwelling, manufactured housing or a mobile home typically owns only
the housing unit, while she rents a site in a mobile home park on which the coach is
situated. This separation of ownership ensures that the cost of residing in a mobile home
depends, not only upon the economic value of the structure, but also upon the site rent
charged by the owner of the mobile home park. When rent control is applied to a mobile
home park, the regulated price applies only to the site on which the manufactured home is
placed. Under "vacancy control," the right to rent the site at this regulated price is
transferred to the incoming resident when the mobile home is sold.
4
These two factors, the divided ownership of land and structure and the imposition
of rent regulation on only a small fraction of the local housing market, have important
implications for the economic consequences of rent regulation as applied to manufactured
homes in mobile home parks.
The fact that mobile homes are usually a small portion of the local housing market
means that rent control rules have little or no impact on the level of regional housing
prices. As price takers, the owner occupants of mobile homes sell their units at market-
determined prices prices that reflect the operation of supply and demand across a large
number of substitutable dwellings. If there is an increase in demand for housing in a
local market, there will be upward pressure: on mobile home prices as well as the prices
of condominiums; on the prices of owner-occupied housing as well as apartments. The
fact of divided ownership also implies that the right to occupy a mobile home site at a
regulated rent in a mobile home park may have intrinsic economic value. A dwelling
owned by a resident is affixed to land rented under well-defined terms from another
entity, the mobile home park owner. If the site is rented under a "vacancy control"
regulatory environment and if prices that potential new renters would willingly pay are
above the regulated rent, then the right to occupy the site will certainly be valuable.
Analogous variations in the intrinsic value of rental contracts arise quite routinely in the
commercial real estate market when assignable leases for fixed terms at below-market
rents are transferred among tenants in return for economic considerations.3
3 Within the housing market, the capitalization of contractual terms is not uncommon either. For
example, it has been found that the favorable terms of assumable mortgages at below market
interest rates are capitalized into the selling prices of single family houses. (See, for example,
Duming and Quigley, 1985.)
5
In the mobile home market, transfer of the lease for site rental is accomplished
only when the dwelling is sold by one resident to another. The tied sale of the coach
together with the right to occupy a site is analytically equivalent to the transfer of rental
rights together with a payment of "key money" in apartment rent control.4 In the case of
mobile home rent control, the price paid by a prospective resident when she purchases a
coach may include "key money" (i.e., the capitalized value of the rent control contact).
These tied transactions are invariably illegal under rent control ordinances adopted for
apartments, but tied transactions are inevitable under mobile home rent control
ordinances.
This perspective on mobile home rent control is very difficult to reconcile with
the stated objectives of the rent control ordinances adopted by many local jurisdictions.
Indeed, capitalization makes it logically impossible for these regulations to increase
"affordability of housing" at the time of enactment any time or in the future.
Other related objectives are sometimes invoked by local jurisdictions enacting
mobile home rent controls Consider for example, the broadly related objective of
"increasing the supply of housing that is affordable" to middle income households. With
capitalization, the tied sale of a regulated rent contract and a physical structure
completely frustrates the attempt to achieve this objective through rent control on mobile
homes. In a competitive market, these individuals selling manufactured homes are price
takers, charging the market price for the structure and the rental contract they offer in a
tied sale. The small number of mobile home sellers in the large market for housing
4 In apartment rent control, "key money" is typically paid to the landlord or her agent, while in
mobile home rent control the value of the regulated site rent is paid to the vacating tenant.
Analytically this makes no difference.
6
services will thus obtain the full benefit of any reduced rents mandated by the regulation.
The cost of housing to subsequent consumers is completely unaffected by the rent
regulation, and housing is no more "affordable" afterwards than it was before the
ordinance was adopted. In the limit, all the benefits are enjoyed by the lucky people who
were mobile home owners at the time the ordinance was enacted.
Consider the objective of remedying a "shortage of manufactured home park
space" relative to its demand. Sometimes this objective is characterized as remedying a
condition of "low vacancy rates" in mobile home parks. The regulation of rents which
can be charged by park owners can hardly further these objectives. Housing suppliers
compete in the market for housing services, but also in the market for capital. Price
regulation discourages the investment of capital in supplying mobile home parks. Indeed,
it is hard to imagine that the imposition of price controls would have any impact on
mobile home park space, except to reduce the amount of available space. When price
goes down, demand goes up, and supply decreases.
Consider the broader objectives of protecting tenants because of the "difficulty
and expense of relocating" their manufactured homes or of "facilitating fair bargaining
between landlords and tenants" in mobile home parks. If the owners of mobile home
parks were able to exert market power to extract higher prices from tenants, then the
protection of consumers from monopoly power would justify a variety of regulations.
But mobile home park owners compete broadly in the market for housing
services, not narrowly in a market defined as the renting-of-mobile-home-spaces-to-
consumers-who-already-awn-mobile-homes. Consumers freely choose among types and
5 The related objectives discussed below are noted in the preamble to rent control ordinances
adopted in a number of cities in California.
7
quantities of housing, and no consumer is compelled to reside in one form of housing or
another.
Nevertheless, in choosing housing accommodations, transactions and moving
costs are certainly relevant, and these costs are unquestionably higher for those
consumers who already own mobile homes. It may seem that a mobile home park owner
could behave as a monopolist when bargaining with a tenant once that tenant's
manufactured home has been placed in the owner's park. It may seem that the park
owner could increase rents subsequently to extract any equity the coach owner had
developed - for example, by owner investments in landscaping, in carports, and
accessories. As a monopolist, the park owner could increase rents above the market
level, up to the considerable cost of moving the dwelling to another site.
But consider the implications of this behavior for the economic health of the park
owner. The consequences of engaging in this activity could be observed quite easily
by other owners of mobile homes in the park, but also by other housing consumers in the
region. The overwhelming majority of these other consumers are not currently owners of
manufactured housing. If these consumers observed this form of rent gouging by the
park owner, they would be far less likely to choose a mobile home as a form of housing.
Those who did choose this form of shelter would be far less likely to locate in the park
owned by the rent gouger. Together, these reactions would increase the vacancy rates in
the park, and the forces of competition between owners of the mobile home parks and
other suppliers of housing services would make this form of rent gouging behavior
unprofitable. If fears of rent gauging were wide-spread, we should expect that the
dominant type of mobile home contract would be the long-term lease. Although long-
8
term leases are written in the mobile home market, they are not the usual form of
contract.
III. Empirical Analysis of Mobile Home Rent Control
A. Preliminaries
There is only limited empirical evidence on the economics of mobile home rent
control, but the fragmentary evidence is consistent with the reasoning described above.
For example, there is weak evidence that, ceteris paribus, the average selling prices of
mobile homes are higher in jurisdictions which have imposed mobile home rent control
(Hirsch, 1988). There is also evidence that the supply of mobile homes declines with the
imposition of mobile home rent control. This evidence is based upon variations in
shipments of new mobile homes to California during 1977-1992 as the mobile home
regulatory environment varied (See Hirsch and Rufolo, 1999).
In this paper, we present new evidence based on a detailed case study analyzing
the economic consequences of mobile home rent control in three mobile home parks in
three different cities and regions in California. The locations chosen, Marin County,
Santa Barbara County, and San Diego County, contain both breathtakingly high priced
housing and more modest accommodations. Site rentals in these mobile home parks are
regulated under a system of "vacancy control" rules imposed by the cities. These rules
fixed rents on a given date, and they permit regular increases from the base rent equal to a
9
fixed percent of any increase recorded in the local cost of living index.6 No other direct
forms of housing price controls are in effect; mobile home dwellings are bought and sold
by housing consumers at unregulated prices, but imbedded in each sale of a mobile home
is the right to occupy the land to which it is affixed in return for payment of the regulated
rent.
We consider the consequences of mobile home rent control on the consumers of
mobile homes in these three cities. Table 1 reports the number of dwellings in these
cities and in the counties in which they are located. In the larger county housing markets,
mobile homes represent very small fractions of the available housing stock: 0.5 percent in
Marin County; 5.4 percent in Santa Barbara County; 4.3 percent in San Diego County.
Within the three cities which impose rent control, mobile homes represent 1.8 percent,
7.7 percent, and 13.1 percent of the housing stock respectively.
B. Indirect evidence from Price Trends
The right to a rent controlled parcel of land may have economic value if the
regulated rent is significantly lower than the market rent set by competition among the
other dwellings in the each city and county housing market. We explore two bits of
indirect evidence on this point: (1) a comparison of mobile home rents over time in one
of the three regulated mobile home parks with the selling prices of condominium units in
a complex immediately adjacent; and (2) a comparison of the regulated mobile home site
6 In the city in Marin County, for example rents are pennitted to increase at three quarters of the
increase recorded in the previous year in the Consumer Price Index for all Urban Consumers
(CPI-U) for the San Francisco CMSA. In the city located in Santa Barbara County, rents are
permitted to increase at three quarters of the increase in the CPI-U for Los Angeles-Long Beach-
Anaheim.
10
rents in another of these mobile home parks with price trends of single family homes in
the surrounding area.
A complex of town homes lies immediately adjacent to the entry to the mobile
home park in Marin County. In fact, the entrance to the mobile home park bisects the
townhouse complex. Figure 1 presents a scatter diagram indicating all sales recorded
from April 1998 through June 2002 for these townhouses. All townhouse sales are
dwellings with two bedrooms and one bathroom, and all recorded sales involved one of
three designs. Figure 1 also reports the course of regulated site rents at the mobile home
park directly adjacent. Both data series are normalized to a value of 100 in April 1998.
As the figure indicates, the rate of appreciation in the private market has been substantial.
The increase in prices for townhouses was more than 70 percent through December of
2001. In contrast, the increase in site rents in the mobile home park, as permitted by
the rent
11
Table 1
Number of Dwellings in Three Cities Imposing Rent Control and in their Surrounding Housing Markets
Dwellings
Marin
County
City
Santa Barbara
County City
San Diego
County
City
Total units
104,990
22,960
142,901
20,442
1,040,149
18,833
Single detached
63,666
10,490
79,751
12,125
530,430
10,609
Single attached
8,452
1,992
9,300
1,740
98,101
1,619
Mobile homes
542
413
7,774
1,578
44,234
2,474
Owner-occupied
5,519
9,795
76,579
13,778
552,461
13,120
Renter-occupied
36,221
10,348
60,043
6,082
443,126
5,350
Unspecified
13,650
2,817
6,279
488
45,472
363
Source: U.S. Census Bureau, Census 2000, Summary file 3.
12
Figure 1
Townhouse Sale Prices and Regulated Mobile Marne Site Rents
in Merin County: April 1998 - June 20102
m
S
x
d T
fl
Lp E3 13
0
0
a
0
❑ 864-sgftdesign a ❑ 0 fl a
4 932-,sgftdesign
* 987-sgftdesgn
e Mobile Home Rents'
❑ .
d
00
° ~,..R.,....i • o
0
.a•
0
0...~• .
Pik' . ~O' • ~ ~
00
0
Apr-98 Jul-98 Nov-98 May-99 Sep 99 Jan-oo Jun-00 Oct-oo May-01 Aug-01 Jun-02
Time
13
control regulation, was considerably more modest. Through December of 2001,
regulated increases amounted to about 16 percent, or less than one-fifth of the price
increases in the unregulated housing market.7
The figure also presents semi log regression estimates of the course of town house
sales and mobile home rents. For the unregulated townhouses, the estimated price
gradient is almost four times the gradient for mobile home rents.8 Using these regression
models, the estimated price increase in town homes was 94 percent during the April
1998-2004 period. The increase was 19 percent for mobile home rents.
Using methods reported in detail in Appendix B (a standard Box-Cox hedonic
price model), we estimated a price index for sales of single family census tracts
surrounding the mobile home park in San Diego County. Figure 2 presents
7 The course of regulated rents increased by 17.4 percent from April 1998 through June 2002
while the national consumer price index increased by 10.7 percent during the same period.
8 The lines presented in Figure 1 are based upon regressions of condominium sales prices (P) and
regulated rents (R)
Log P= - 0.009 + 4.538T - 0.0255 + 0.010L
(0.37) (15.76) (0.81) (0.36)
Log R= - 0.003 + 1.170T
(1.05) (33.87)
where T is time (in days X 104) from April 1, 1998 and S and L are dummy variables for small
and large condominium designs, respectively. t-ratios are reported in parentheses.
14
Figure 2
Regulated Mobile Home Site Rents and Unregulated Land Values
in San Diego County: January 1995 -December 2003
a
i1
c
ro
x
c
IL
r
0
13
0
d
Estimated land :values in neighborhood p
Regulated mobile home site rents
d
C7
Cf
t7
Q
it
CI
L"~ p
ri
13
'All
Jan-1995 Jun-1996 Jan-199 Jun-1998 Jan-1999 Jun-2000 Jan-2001 Jun-2002 Jan-2003 Jun-2404
Time
15
these estimated prices together with the course of regulated mobile home rents during the
period 1995-2003. As the figure indicates, the rate of price appreciation for properties in
the surrounding area has been substantial. Prices increased to more than 220 percent of
the initial level through March 2003, while regulated site rents had been permitted
to rise by only about 20 percent.9
C. The Capitalization of Contractual Terms
The wide divergence between the price gradient for regulated site rents of mobile
homes and the price gradient for the adjoining housing units creates some presumption
that the favorable terms enjoyed by current mobile home owners will be capitalized, in
some part, into the selling prices of mobile homes. The comparison of sale prices for
single family homes not subject to rent control reinforces this presumption.
To analyze the capitalization of contractual terms, we only need note the link
between the flow of the benefits of occupancy and the value of the stock. Recall that the
value, V, of property yielding an annual return, R, in perpetuity is
(1) V= (1Ri)+(1 Ri)2 +...+(1 R)~ = (Ili)R,
where i is the interest rate.
9 The lines presented in Figure 2 are based upon regressions of the index of single family sales
prices (S) and regulated rents (R)
Log S= - 0.131 + 2.859T
(4.71) (18.83)
Log R= - 0.007 + 0.488T
(1.91) (24.68)
Where T is time (in days x 104) from January 1, 1995. t-ratios are reported in parentheses.
16
Suppose that rents are expected to remain constant; then from (1), the annual rent
on property value at V is:
(2) R = N.
This formulation emphasizes i as the "user cost of capital," the annual cost of using one
dollar's worth of real property.
The sale of a single family home at the price of VS, implies the transfer of a
structure with a value of SS and the right to use, and to dispose of, a plot land with market
value of L.
(3) VS =Ss +L.
From equation (2) the annual cost of occupancy of a property valued at VS, the
implicit rent, RS, consists of two parts,
(4) Rs = N' = iSs + iL,
the user cost of the structure, iSs , and the market rental rate of the lot on which the
structure is built, iL. In contrast, when we observe the sale of a mobile home under rent
control at a price of V', it consists of the transfer of a coach with the value of S" and the
right to use a plot under specified conditions. Under vacancy control price regulation, the
purchaser receives the right to rent the site upon which the mobile home is placed in
return for some regulated annual rent of Q. The purchaser also enjoys the opportunity to
transfer that right by selling the mobile home to a subsequent purchaser. In general, the
annual benefit of holding this right is the difference between the market rent for the lot
(iL) and the regulated rent, Q, paid to the park owner,
(5) rZ=iL-Q.
17
Equation (5) relates the annual benefit of controlled rent to the annual cost, rZ, of
that right. In equation (5), r represents the interest rate at which the mobile home buyer
can finance her purchase, and Z represents the cost of acquiring the right to occupy the
mobile home site at the regulated rent . The left side of equation (5) is thus the "user
cost" of the right to the consumer, and the right hand side is the annual benefit to the
consumer of enjoying this right, iL-Q. If the rent is regulated in perpetuity at the level of
Q and if market land rents are constant, then from equation (1), the market value of the
benefit, Z, is
(6) Z = (11r)[iL - Q].
If interest rates for land rent and mobile home finance are equal, r=i, then
(7) Z=(11i)[iL-Q].
If the currently regulated rent is assumed to remain in force forever and if r=i,
then the annual benefit from the rent regulation will be "fully capitalized" into the market
value of the right of Z.
More generally, if there is some uncertainty about the duration of regulation, or if
interest rates for mobile home finance r and land rent i are not identical, the annual
benefit may be capitalized at some fraction k
(8) Z = k(i1rX11i)[iL - Q] = k(ilr)[L - Qli].
Note that if i=r and k=1, the expression is again identical to equation (1).
In any event, when we observe the sale of a mobile home at a price of r, the
transaction includes the transfer of a coach whose value is Sm, and also the transfer of the
right to use the site, which has a market value of Z,
(9) V- =S-+Z.
18
If Z and L were observed, then we could infer the rate of capitalization, k, directly
from equation (8).
D. Data Assembly
As indicated in equation (8), the capitalization of rent control benefits depends
upon:
V'-S' the difference between the selling price of the mobile home and the
value of the coach, which is equal, to Z;
Q the rent to the park owner stipulated in the rent control regulation;
L the market value of the land on which the mobile home is sited;
as well as the interest rates r and i.
Of the four variables, two are available directly from a sample of mobile sales
the transaction price, V, and the regulated rent at the time of sale, Q. It may be
surprising to note that an estimate of the value of the coach, Sm, is also routinely available
for mobile home sales.
The year, make, and model of a manufactured home are sufficient to identify an
estimate of its value in the National Automobile Dealers' Association
Mobile/Manufactured Housing Appraisal Guide or from the Kelley Blue Book. These
estimates are analogous to the "blue book" values reported for used cars.10 For mobile
homes, the guides report an average valuation for the structure in average condition with
no specific reference to the location or siting of that structure. The estimate of value for
any specific coach is thus subject to error. But it should also be noted that the Kelley Blue
10 Indeed, NADA as well as Kelley's Blue Book produce regular valuation guides for automobiles,
trucks, and limousines, as well as mobile homes.
19
Book and the NADA Appraisal Guide are widely used by public officials in assessing
manufactured housing for property taxes.11 Indeed the California Revenue and Tax Code
(Section 5803) directs assessors to consider the NADA Appraisal Guide and/or the Kelley
Blue Book valuations when assessing mobile homes for local property taxes.
The methodology underlying these appraisal guides is, understandably,
proprietary. Thus there is no published evidence on the properties of either guide as an
estimator of the market prices for mobile homes. In Appendix A we present independent
evidence that the NADA prices are unbiased. We gathered data on all sales of mobile
homes in three parks subject to vacancy control rent regulations, one in a city located in
each county during time intervals spanning 1999-2004. Sale prices of these mobile
homes, together with Appraisal Guide and Blue Book estimates of the value of coaches,
permit us to estimate the economic value of rent regulations.
Table 2 reports the economic value of the right to rent control based upon 245
sales of mobile homes in these three parks during the period of 1999-2004. Given the
high housing and land costs in California, it is not surprising that the benefits of rent
control are quite large, averaging almost $24,000 in each sale in the park located in a
modest neighborhood in San Diego County, up to $105,000 in each sale in the park
located in exclusive Santa Barbara County. On average, this right represents between 48
and 88 percent of the value exchanged in the transactions on manufactured housing in
these parks. The implied value of this right, per square foot of land included in each
transaction, varies between $6.50 and $41.00 on average. The markups over the
11 See http://www.saccountv.net/assessor for but one example of the use of the NADA Guide for
assessment.
20
Table 2
Estimated Value of the Right to Occupy Mobile Home Sites at
Regulated Rents at Three Mobile Home Parks in Different California Counties
1999-2004
Estimated Value
of Contractual Right (Z)
Marin
Santa Barbara
San Diego
At the time of sale
Mean
$60,677
$105,054
$24,014
Median
55,295
100,363
23,605
Standard Deviation
28,112
35,411
14,722
As Percent of Selling Price
Mean
67%
88%
48%
Median
73%
88%
57%
Standard Deviation
12%
4%
47%
Estimated Value
per Square Foot (Z/sgft)
Mean
$14.06
$40.90
$6.52
Median
14.10
38.96
6.19
Standard Deviation
6.09
15.64
4.08
As Percent of
Coach Value (Vm/Sm)
Mean
340%
919%
256%
Median
366%
842%
231%
Standard Deviation
107%
352%
135%
Notes: For the mobile home park located in Marin County, the estimates are based upon 40
sales of mobile homes during the period 1992-2002. The value of the coach was estimated
using the ,4A,4 Guide for the time of sale.
For the mobile home park located in Santa Barbara County, the estimates are based upon 64
sales of mobile homes during the period 1999-2004. The value of the coach was estimated
using the Kelley Blue Book estimate for the time of sale.
For the mobile home park located in San Diego County, the estimates are based on 141 sales
of mobile homes during the period 2000-2004. The value of the coach was estimated using
the ,4A,4 Guide for the time of the sale.
21
appraisal guide values of the coaches in these transactions average between 250 and 900
percent.
These averages conceal a wide dispersion of individual estimates. As the table
indicates, the estimated value of the premium paid to enjoy the right to regulated rents
has a large variance. Of course, many factors other than the value of the structures and
the right to regulated rents affect the sale price of individual dwellings.
In equation (8), the benefits enjoyed under rent control depend upon the
difference between the market value of the land associated with the mobile home and the
controlled rent which is actually paid each year. Unfortunately, direct evidence on the
value of land is difficult to obtain in heavily developed areas. Data on sales of
unencumbered land or building lots in the built-up neighborhoods surrounding the mobile
home parks were unavailable.
Of course, residential land in the local area is traded daily - but as a component of
the transactions in single family housing. We investigated the value of land in the
housing market surrounding these mobile home parks using hedonic methods applied to
all sales of single family housing in the area surrounding the mobile home park. This
analysis, using Box-Cox hedonic models to estimate local land values, is reported in
Appendix B.
Table 3 summarizes the estimates of the land values obtained from the hedonic
regressions reported in Appendix B. It summarizes estimates of the land values
associated with the parcels containing the mobile homes in each of the three parks for
which we have observed transactions. The table presents the mean value per parcel and
per square foot. Also presented are the standard deviations and the range of the
22
Table 3
Estimated Value of Land per Parcel and per Square Foot at the Time of Sale in
Three Regulated Mobile Home Parks in Different California Counties
1999-2004
Land Value
Marin
Santa Barbara
San Diego
All Properties
Mean
$212,569
$211,605
$145,101
Median
206,366
204,059
141,570
Standard Deviation
39,102
74,731
26,403
All Properties
per Square Foot
Mean
$49.17
$77.97
$39.34
Median
48.94
73.15
37.34
Standard Deviation
6.64
18.20
6.46
Mean Value by Year
1999
$171,085
$161,055
NA
2000
226,058
165,111
$113,719
2001
223,803
209,997
129,527
2002
218,312
212,879
152,864
2003
NA
282,392
178,117
2004
NA
288,377
NA
Standard Deviation by Year
1999
$17,728.6
$42,881.0
NA
2000
39,150
47,555
$9,888.7
2001
30,663
56,554
9,971
2002
52,297
72,403
16,044
2003
NA
' 68,746
14,723
2004
NA
68,787
NA
23
estimates. The table also summarizes the estimates of the land values of mobile homes
sold at different time periods.
As estimated by the hedonic model, the average market value of mobile home
land parcels in the neighborhoods surrounding the mobile home parks was quite large
$145,000 in the park located in San Diego County, and more than $200,000 in Santa
Barbara and Marin Counties.
The land values reported in Table 3 allow us to estimate the annual value of the
reduction in land rents arising from the rent control regulation. This is merely the market
rental value of a land parcel minus the regulated rent paid to the park owner. These
regulated rents are public records. Table 4 summarizes estimates of this reduction in land
rents at the date of each sale. Using the Freddie Mac mortgage interest rate for the month
of the sale, the rent reduction averaged about $2,300 in San Diego County, up to $11,000
in Santa Barbara County. The reduction in land rents averages $0.60 per square foot in
San Diego County and $4.00 per square foot in Santa Barbara County.
D. Mobile Homes Finances and Capitalization: Results
The link between the annual benefits from lower land rents and the annual costs
for mobile home occupancy also depends upon the relationship between mobile home
finance interest rates and market interest rates. The large consumer investments in
mobile homes are often amortized by long-term loans originated by banks or other
24
Table 4
Estimates of Reduction in Annual Site Rents Arising from
Rent Control at Three Regulated Mobile Home Parks in
Different California Counties
1999-2004
Rent Reduction
Marin
Santa Barbara
San Diego
(iL -Q)
Mean
$8,144
$11,128
$2,253
Median
7,437
11,668
2,079
Standard
Deviation
3,337
3,972
908
(iL -Q)/ per sgft
Mean
$1.81
$4.03
$0.60
Median
1.94
4.15
0.57
Standard
Deviation
0.47
0.68
0.18
25
financial institutions. These loans differ from conventional home mortgages. 12 In
general, loans for mobile homes are more similar to other personal property loans (e. g.,
automobile and boat loans) than to loans for real property (e. g., mortgages for single
family housing).
Thus, mobile home loans are made at higher interest rates and for shorter terms
than are housing loans, and they are often made with higher down-payment requirements.
As a result of these features, there is no central source of data describing new mobile
home loans. Table 5 reports a sample of rates and terms advertised in August 2002
(when home mortgage interest rates reported by Freddie Mac were 6.75 percent for 360
months for 80 percent loan-to-value, LTV, mortgages), and in March 2004 (when home
mortgage rates were 5.50 percent for the same terms). In 2002, mobile homes loans were
advertised at 48 months to 120 months, with interest rates quoted at 9 to 17.5 percent, and
LTV ratios varying between 70 and 85 percent. The advertised rates averaged 1.81 times
the mortgage interest rates at the time.
In an identical web survey in March 2004, it appeared that fewer institutions
advertised mobile home loans, and fewer listed their terms on their website. The rates
12 One important difference is that there is little secondary market for these loans. Freddie Mac
and Fannie Mae seldom purchase these loans at all. The FHA program is quite small, and it is
confined to mobile homes permanently affixed to land owned by the borrower. Some pools of
mobile home loans are securitized by banks (often with a guarantee of some form). This
securitization is similar to techniques sometimes used for automobiles, credit card debt, or
accounts receivable.
26
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advertised averaged 1.80 times the mortgage interest rate in March 2004. This evidence
is hardly systematic, but it does suggest that the interest rates for used mobile home
finance are at least 1.5 times the rates charged for home mortgages. Since LTVs are
higher and terms are shorter for mobile home loans, this suggests that the ratio of
adjusted interest rates is higher still.
The observations on sales of mobile homes, "blue book" appraised values, land
values, and some assumptions about the relationship between mortgage interest rates and
mobile home interest rates permits the capitalization rate to be estimated from equation
(8)•
Table 6 presents alternative regression estimates of the fraction of annual benefits
from rent control which are capitalized into higher annual housing payments. The
estimates of capitalization are, of course, sensitive to the relationship between interest
rates on mobile home loans and market interest rates. The most conservative, and clearly
unrealistic, assumption is that the two interest rates are identical (r=i). Under these
assumptions, the point estimates of capitalization are 53-69 percent, in the three mobile
home parks with 95 percent confidence intervals of 46-74 percent. If borrowing rates for
mobile home finance are 1.5 times market interest rates (See Table 5), the capitalization
rate is estimated to be 80-102 percent in the three parks with a 95 percent confidence
intervals from 69 to 115 percent. The numerical results are quite similar if interest rates
on mobile home loans are assumed to be 350 basis points higher than the market rates.
Although the capitalization parameter is precisely estimated, its interpretation is
sensitive to the differential in interest rates. For any reasonable differential, a substantial
fraction of the mandated reduction in rents is simply reflected in increased prices and
28
hence carrying cost for purchases of mobile homes. Although the fraction could be as low
as 0.8, it may easily be as high as 1.0.
IV. Affordability
The high rates of capitalization of the benefits of vacancy control rent regulation,
in this circumstance at least, means that the rent control regime has a negligible effect
upon the affordability to consumers of the dwellings so regulated. Despite this, the
regulations have an inhibiting effect upon the supply of housing suitable for moderate
income households in the region.
Incoming tenants to the park pay the market price for housing. Through the
operation of the housing market, the capitalized values of the below-market site rents
mandated by the ordinance are reflected in increased prices when coaches and rental
rights to sites are transferred among housing consumers. Increased sale prices, in turn,
lead to higher carrying costs for the purchase of mobile homes.
29
Table 6
Regression Estimates of the Fraction (k) of Annual Benefits
Capitalized into Higher Annual Housing Payments in Regulated
Mobile Home Parks in Different California Counties
95 percent Con
fidence Interval
Estimate of k
Lower
Upper
R-squared
Assuming: r= 1.5 x i
Marin
0.80
0.69
0.91
0.84
San Diego
0.94
0.83
1.05
0.67
Santa Barbara
0.90
0.83
0.97
0.92
Assuming: r = 1.5 x i
(normalized by lotsize)
Marin
0.86
0.74
0.97
0.86
San Diego
1.00
0.88
1.11
0.68
Santa Barbara
1.03
0.95
1.11
0.91
Assuming: r= i + 0.035
Marin
0.78
0.67
0.88
0.84
San Diego
0.96
0.85
1.07
0.67
Santa Barbara
0.92
0.85
0.99
0.91
Assuming: r= i + 0.035
(normalized by lotsize)
Marin
0.84
0.73
0.95
0.85
San Diego
1.02
0.90
1.14
0.68
Santa Barbara
1.05
0.97
1.13
0.91
Assuming : r=i
Marin
0.53
0.46
0.60
0.84
San Diego
0.63
0.55
0.70
0.67
Santa Barbara
0.60
0.55
0.65
0.92
Assuming: r=i
(normalized by lotsize)
Marin
0.57
0.50
0.65
0.86
San Diego
0.67
0.59
0.74
0.68
Santa Barbara
0.69
0.63
0.74
0.911
30
The net effects of the regulatory regime on the affordability of these dwellings in the
local market can be estimated, at least roughly. For each observed mobile home transaction,
we can estimate the household income required to make the purchase in the absence of rent
control. This estimate of required household income can then be compared to the required
household income at the observed sale price.
A. Housing Affordability Under Rent Control
To calculate the household income required for mobile home purchase under rent
control for an eighty percent LTV mortgage, we compute the monthly mortgage payment
using the interest rate at the time of sale to amortize a loan 80 percent of the observed
sale price of each mobile home. We add to this payment the mandated monthly rent.
According to federal guidelines, housing is considered "affordable" if monthly housing
payments are less than thirty percent of monthly income. So the required household
income is 3.33 times the level of housing payment.
B. Housing Affordability in the Absence of Rent Control
If rent control were not in effect, the purchase price of mobile homes would fall,
reflecting elimination of the capitalized benefit of below-market site rents, while the
monthly rents would rise to the market level. The monthly mortgage payment would
therefore be lower, but this would be offset, at least in part, by a higher rent. Using the
same assumptions as above, but with a purchase price equal to that reported in the
appraisal guide as the valuation in the absence of rent control, and with a rent equal to the
estimated market rent for each parcel at the time of sale, we can compute the housing cost
31
and hence the required income in the absence of rent control to purchase each mobile
home.
In Figure 3, the abscissa measures the income required to purchase each mobile
home in the current rent-controlled environment. The ordinate reports the corresponding
estimate in the absence of rent control. The 45 degree line separates the diagram into two
regions. Above the line, the income required to purchase a mobile home is higher in the
absence of rent control. Below the line, the income required to purchase a mobile home is
higher in a rent-controlled environment.
In constructing Figure 3, we assume that the interest rate at which buyers can
finance used mobile home purchases is 1.5 times the prevailing rate at the time of sale for
conventional home mortgages. We further assume that mobile home loans are for twenty
year terms. These financing assumptions clearly affect the results shown in Figure 3. (But
from Table 5, they are clearly conservative.) The more stringent financing terms for
mobile home purchases raises the income required for purchase. Since rent control forces
buyers to pay higher capital costs, rent control increases costs more with more stringent
financing terms. The less favorable the financing terms, the less favorable is rent control.
Figure 3 illustrates that the income required to purchase a used mobile home is
not affected very much by the presence of rent control. Most of the observations are
below the 45 degree line where the income required to purchase a mobile home is greater
32
Figure 3
Income Required to Purchase Mobile Homes with and without Rent Control
T
0
T4
T4
c
8
r -
p
E
c
Marin ■
i
Santa Barbara
o
r ■
Ole ~ ■ a
w,
M
QOa 40Wo Income req ired under curre rit ccnditions JoW~ 1 WQ
San Diego
a•
.o a
C
33
under rent control. But there is substantial variability across the mobile homes. There is
certainly no evidence that the institution of rent control, in any of these markets, has
made mobile homes more affordable to consumers. Any benefits of below-market rents
mandated for residents are simply undone by the capitalization of these benefits in the
marketplace.
V. Conclusion
This paper presents an economic analysis of mobile home rent control and a
detailed empirical assessment of vacancy decontrol rent regulation in three mobile home
parks in three different housing markets in California. The analysis indicates that the
benefit enjoyed by tenants from lower rents leads to increased prices when dwellings are
transferred among tenants. These higher transactions prices lead to higher annual
payments made by tenants to retire the debt incurred in purchasing a dwelling and in
purchasing the right to a controlled rent.
Estimates of the magnitudes of these effects are obtained from observations on the
arms-length sales of samples of manufactured housing home sales in three parks subject
to rent control in California. Estimates of land values were obtained from the statistical
analysis of single family housing sales in neighborhoods surrounding each of the mobile
home parks.
The empirical analysis documents: that the average mobile home sale in all three
markets includes a substantial payment of for the right to enjoy a regulated rent at quite
34
favorable terms; and that the market value of the land exchanged with the mobile home is
very substantial.
Reasonable assumptions about the financing of mobile home purchases lead to the
conclusion that virtually all of the annual economic benefits from lower regulated rents
are paid out annually to finance the higher sales prices commanded by those dwellings in
each of the three mobile home parks subject to rent control. The precise estimates of the
fraction of benefits paid out vary, depending upon the statistical model and the economic
assumptions employed. Based upon regression estimates, most or all of the benefits are
capitalized.
Using reasonable financing assumptions, we find that the effect of a regime of
vacancy control rent regulation in these three markets increases the variance in the costs
of occupying mobile homes, but no systematic effect upon the average monthly costs of
housing to consumers. Specific individual mobile homes might be more or less
"affordable" as a result of the regulation, but on balance, the effect of lower mandated
rents to consumers is offset by the higher purchase prices of mobile homes.
35
References
Alston, Richard M., J. Kearl and M. Vaughn, "Is There a Consensus Among Economists
in the 1990s?" American Economic Review, 82(2), 1992: 203-209.
Arnott, Richard, "Rent Control," The New Palgrave Dictionary of Economics and the
Law, New York: MacMillan and Co., 1998
Auletta, Kenneth, And the Streets Were Paved with Gold, New York: Random House,
1979.
Basu, Kaushik and Patrick M. Emerson, "The Economics and Law of Rent Control," The
Economic Journal, 110(466), 2000: 939-962.
Box, G. E. P., and D. R. Cox, "An Analysis of Transformations," Journal of the Royal
Statistical Society, Series B, 1964: 26.
Cummings, Jean L. and Denise DiPasquale, "The Low-Income Housing Tax Credit: An
Analysis of the First Ten Years," Housing Policy Debate, 10(2), 1999: 251-307.
Durning, Dan and John M. Quigley, "On the Distributional Implications of Mortgage
Revenue Bonds and Creative Finance," National Tax Journal, 38(4), 1985: 513-
524.
Englund, Peter, John M. Quigley, and Christian Redfearn, "Improved Price Indexes for
Real Estate: Measuring the Course of Swedish Housing Prices, " Journal of Urban
Economics, 44,1998: 171-196.
Glaeser, Edward L., "The Social Costs of Rent Control Revisited," National Bureau of
Economic Research Working Paper 5441, January 1996.
Glaeser, Edward L. and Erzo F. P. Luttmer, "The Misallocation of Housing Under Rent
Control," National Bureau of Economic Research Working Paper 6220, October
1997.
Glaeser, Edward and Erzo F. P. Luttmer, "The Misallocation of Housing Under Rent
Control," American Economic Review, 93(4), 2003:1027-1046.
Griliches, Zvi, Price Indexes and Quality Change: Studies in New Methods of
Measurement, Cambridge, MA: Harvard University Press, 1971.
Hirsch, Werner Z., "An Inquiry into Effects of Mobile Home Park Rent Control,"
Journal of Urban Economics, 24, 1998: 212-226.
36
Hirsch, Werner Z., and Anthony M. Rufolo, "The Regulation of Immobile Housing
Assets Under Divided Ownership," International Review of Law and Economics,
19, 1999: 383-397.
Kain, John F. and John M. Quigley, "Note on Owners' Estimates of Housing Values,"
Journal of the American Statistical Association, 67(340), 1972: 803-806.
Oates, Wallace E., "The Effects of Property Taxes and Local Spending on Property
Values," Journal of Political Economy, 77, 1969: 957-971.
Quigley, John M., "The Taxation of Owner-Occupied Housing," The Encyclopedia of
Housing, Sage Publications, 1998: 579-581.
Sheppard, Stephen, "Hedonic Analysis of Housing Markets," in Handbook of Regional
and Urban Economics, Eds. Paul Cheshire and Edwin S. Mills, New York and
Amsterdam: Elsevier, 1999: 1595-1636.
Turner, Bengt and Stephen Malpezzi, "A Review of Empirical Evidence on the Costs and
Benefits of Rent Control," Swedish Economic Policy Review, 10, 2003: 11-56.
37
Appendix A
To investigate the properties of the Appraisal Guide, we gathered observations on
mobile home sales in another state (Arizona) in which rent control is illegal. For a
sample of 89 mobile home sales in Arizona in 2000-2003, we obtained the selling price,
as well as the year, snake and model of the coach. This information, together with the
date of sale, is sufficient to identify the estimate of value reported in the appropriate
edition of the NADA Appraisal Guide.
Figure Al reports the relationship between the appraised values and the
transaction prices of these mobile homes, sold in jurisdictions where there are no rights to
reduced rents which could be transferred. A simple regression of sale price on the NADA
appraisal yields a coefficient of 1.0906, insignificantly different from one (t=0.45), and
explains 58 percent of the variance in selling prices.
The results indicate that the appraisals provide an unbiased estimate of the observed
market price of used coaches. The sampling variance is high, presumably because there
are a host of other important factors affecting the circumstances of any particular
property sale the urgency of buyer and seller, their negotiating skills, etc.
However, these results indicate that data on the sales prices for a sample of
mobile homes transferred under rent control, together with these published appraised
values of the mobile homes, yield unbiased estimates of the market value of the right to
enjoy the site at the controlled rent. These estimates can be computed for a sample of
mobile home sales from the year, make, model, and the date of sale.
38
Figure Al
NADA Estimates Versus Actual Sale Prices for
39 Mobile Home Transactions In Arizona
a
a
a
E
n
UJ o
C3
Z
c~
N
Q
a
0
a
0
s
r~
0 10000 20000
Y=1.IJ~06x
i
s
e
0
t
30000 40000 50000 60000
}ctuEd Sale Pr
39
Appendix B
The land values reported in Table 3 and in the text are derived from an analysis of
all sales of single detached houses in the neighborhoods of the three mobile home parks.
In all cases the data are drawn from the same municipal jurisdiction as the mobile home
park; in two of the three data sets, the census tract of each dwelling was available and
was used to control for variations in neighborhood amenities. Data on interior area, the
number of bathrooms, the year of construction, the date of observed sale, and the size of
the lot were available for all three cities. These data were available from multiple listing
files for dwellings in Marin County and from Data Quick Information Systems for San
Diego and Santa Barbara Counties.
Table BI reports descriptive information about housing sold in the three areas.
Table B2 reports regression estimates of a price function relating the selling prices of
dwellings to their hedonic characteristics. The hedonic relationship is a Box-Cox (1964)
transformation of the dependent variable, selling price per square foot of lot size. The
hedonic measures include the characteristics of the structure, the lot size, and the
neighborhood, together with a set of indicator variables corresponding to time intervals.
If S represents the selling price per square foot of lot area and X is the vector of dwelling
characteristics, neighborhood amenities and indicator variables defining the time of the
sale, the Box-Cox power series model is:
S-' =a+/3X
Where A, a, and 8 are parameters, estimated by grid search.
40
The estimate of the price per square foot of each parcel of land is the fitted value of the
hedonic regression equation at the time of sale with all of the dwelling characteristics set
to zero. As Table B2 indicates, all three sets of regression coefficients have the expected
signs and the standard errors are quite small.
41
Table B1
Descriptive Statistics for Sales of Single Family Houses Sold in Three
Housing Markets
Marin
Santa Barbara
San Diego
Number of Sales
551
1340
1895
Mean Values
Lot Size (sqft)
8,354
7,747
7,308
Interior Space (sgft)
1,682
1,498
1,366
Bathrooms
2.13
2.03
1.95
Median Values
Selling Price
$498,796
$350,696
$218,909
Year Built
1959
1964
1970
Frequency of Sales by Year
1990
0
54
0
1991
0
83
0
1992
0
89
0
1993
0
77
0
1994
0
98
0
1995
0
78
118
1996
0
97
165
1997
0
115
174
1998
0
131
210
1999
136
123
232
2000
194
92
194
2001
156
89
232
2002
65
78
236
2003
0
93
324
2004
0
43
10
42
Table B2
Regression Coefficients from Box-Cox
Model
Santa
Variable
Marin
Barbara
San Diego
estimate
std. error
t ratio
mate
std. error
t ratio
estimate
std. error
t ratio
x 10^3
x 10^3
r
Intercept
Number of Bathrooms
Lot Size (SgFt)
Bldg Size (SgFt)
Newer Bldg
11.171
-0.460
0.001
-0.001
-0.390
0.25
0.12
0.00
0.00
0.10
43.92
-3.89
46.66
-9.36
-4.07
-3:9.161
2.033
-0.003
0.002
1.366
2.57
0.59
0.00
0.00
0.57
15.23
3.42
-19.07
4.36
2.40
22.113
0.307
-0.002
0.002
1.366
0.76
0.18
0.00
0.00
0.57
28.99
1.73
-37.08
4.36
2.40
Lambda
-0.543
0.869
0.869
1
1
Notes: For Marin County, the model also includes 12 indicator variables representing equally spaced intervals
between January 1, 1999 and August 6, 2002.
For Santa Barbara County, the model also includes 58 indicator variables representing quarter years beginning in
January 1990. The model also includes indicator variables for 8 nearby census tracts.
For San Diego County, the model also includes 34 indicator variables for quarter years beginning in 1995, as well as
indicator variables for 8 nearby census tracts.
43
CITY OF ESCONDIDO
MOBILEHOME RENT CONTROL HISTORY
(Updated January 2008)
INTRODUCTION
Mobilehome rent control has been a controversial subject for the City of Escondido since it was
adopted by initiative measure in 1988. The decade following the adoption of rent control saw
two other initiative measures relating to rent control and nearly 100 court cases, one of which
reached the United States Supreme Court. Literally hundreds of hours have been spent on rent
increase hearings.
Recent years have seen both controversy and litigation subside, but not vanish entirely. While
some rent increase hearings can be difficult, others are concluded efficiently with consensus
among those involved.
After briefly reviewing the history of the mobilehome, this paper talks about the different types
of mobilehome parks, the number of spaces and parks in Escondido, the regulatory history of
mobilehomes, and then discusses California's Mobilehome Residency Law and Escondido's
Rent Protection Ordinance (Proposition K). Following that, various specific issues that have
come up in the last two decades are discussed, including the subject of vacancy control, long-
term leases, park living conditions, and the more recent short-form process.
The purpose of this paper is to provide a sense of historical perspective to those involved with
mobilehome rent control. This historical perspective will educate about issues which have been
confronted and resolved in the past, and perhaps, provide those involved with rent control a
sense of appreciation for that which has gone on before.
II. THE HISTORY OF THE MOBILEHOME
The first mobilehomes, which were typically homemade and most frequently used for camping,
were trailers of a few hundred square feet that could easily be hitched to vehicles. To
accommodate these trailers, many municipalities built camps during the 1920's hoping to
encourage tourism. While long-term occupancy of such camps was not uncommon, it was not
until the Depression of the 1930's that use of these trailers, as a form of permanent housing,
became widespread. During the next decade, numerous additional mobilehome parks were built
to meet immediate and temporary housing needs, particularly near military bases. These origins
helped foster the early perception of "trailer parks" as a form of "slum" housing inhabited by
indigent and rootless members of society. This image, together with hostility from real estate
interests, hotels and tourists camps, initially fostered local land use regulations designed to
exclude mobilehome parks or restrict their development.
Beginning in the 1950's however, mobilehomes began a gradual transformation to broadly
accepted permanent residences. Larger, standardized and sectionalized mobilehomes were
manufactured which could be moved only by trucks. As homes of 1,400 square feet or more
became increasingly common, the larger units permitted more conventional floor plans.
Mobilehomes started to become accepted as permanent living quarters.
The trend toward physical immobility and permanence coincided with extensive efforts to
improve the quality of mobilehome parks. Parks evolved from small, unplanned facilities to
larger, carefully designed communities that often featured amenities such as clubhouses,
swimming pools, greenbelts and landscaping, and extensive social programs. Many senior
citizens and younger families have been attracted to mobilehome park living by these amenities
and by the relatively low housing cost.
Recognizing the valuable contribution they made to the nation's stock of affordable housing, the
federal government, beginning in the late 1960's and early 1970's adopted a number of measures
that spurred the growth and social acceptability of mobilehomes. Congress, for example,
extended insurance for mobilehome park constructions and purchases of mobilehomes.
Congress also authorized the adoption of uniform federal standards that both promoted
mobilehome safety and preempted diverse and conflicting local design specification standards
that had hindered mobilehome production. By 1982, these efforts and a number of demographic
trends had combined to make mobilehomes a significant source of affordable housing for
American families, particularly first-time homebuyers, the elderly, and low and moderate-
income families.
The manufactured home has evolved as a single-family house constructed entirely in a controlled
factory environment, built to the federal Manufactured Home Construction and Safety Standards.
These standards regulate the home's design and construction, strength and durability,
transportability, fire resistance, energy efficiency and quality control. There are performance
standards for the heating, plumbing, air-conditioning and electrical systems. Construction costs
per square foot for manufactured homes are approximately one-third less than site-built houses.
Because moving and installing such homes entails substantial costs, and because spaces in
mobilehome parks are often scarce, most mobilehomes make but one trip - from factory or
showroom to an installation site. Modern mobilehomes, despite their name, have become a form
of immobile, prefabricated housing.
III. TYPES OF PARKS
There have historically been two basic ownership structures for mobilehome parks. In
Escondido, the majority of the parks are rental parks, owned as an investment by an individual or
a group of investors. Other parks in the City are resident-owned and held by the residents in a
variety of ownership structures.
In the rental parks, the owner of the land rents the space on which a mobilehome is placed. In
exchange for the space rent, the park owner maintains the common areas and related amenities,
and monitors the rules and regulations of the park. Some rental parks provide certain utilities
2
and other services to the residents. Other common amenities may be available such as a
clubhouse, swimming pool, shuffleboard courts, or laundry facilities.
In a resident-owned park, the owner of the mobilehome generally holds a fee-simple,
condominium, or corporate share interest in the park. The owners share equally in the ownership
and use of the common areas. There is homeowners' group made up of the individual owners
that governs the upkeep of the common areas and monitors the rules and regulations of the park.
Residents pay a monthly fee for the upkeep and maintenance of the common areas. Spaces
owned by the homeowners' association that are rented may be subject to the Rent Protection
Ordinance if they are not subject to a long-term lease.
A third type of ownership structure has evolved, perhaps largely in response to rent control.
In this third form of ownership structure, the park owner not only owns the space, but has also
acquired the mobilehome. Because the space itself is regulated by the Mobilehome Rent
Control Ordinance, but the coach is not, this became an effective means for park owners to
avoid the effects of rent control. Likewise, one of the core policy arguments behind
mobilehome rent control (the problems caused by a home located on the land of another)
vanishes when the ownership of land and mobilehome are merged. In this form of ownership,
the tenant is free to re-locate if rents become onerous, and there is little difference between this
type of tenancy and that which exists in an apartment setting. As of 2007, approximately 315
spaces in the city were occupied by mobilehomes belonging to park owners.
IV. PARKS IN ESCONDIDO
There are 24 mobilehome parks in the City with a total of approximately 3405 spaces. Five
parks in the City are resident-owned.
At the end of 2007, about 1603 spaces were reported as being subject to the Escondido Rent
Protection Ordinance versus the 2749 spaces that were subject to rent control in 1990. This trend
is in part due to parks requiring residents moving in to sign a long-term lease, which exempts
them from rent control. The remainder of the rental spaces exempt from the Rent Control
Ordinance in the City are vacant, or are spaces occupied by park-owned homes. In 1990 there
were a total of nineteen (19) Senior Parks and ten (10) all age parks. Since that time, five parks
have closed, and the number of Senior Parks has declined to nine (9); the other Senior Parks
converted to all age parks. This trend is due in part to the fact that in the 1990's many Senior
Parks had vacancies they were unable to fill. Once the parks were converted to all age, this
dilemma for the park owner quickly disappeared. Although nine parks in the City are
designated for senior residency only, many seniors live in the family parks as well.
Mobilehomes in the parks range from small, older, single-wide "trailers" to newer triple-wide
"manufactured" homes. Rents for spaces in the rental parks range from approximately $200 to
over $1,100.
V. REGULATORY HISTORY
As mobilehomes have become more permanent, the relationship between park owners and
homeowners has shifted from a strict landlord-tenant relationship (similar to that in residential
apartments) to a relationship more similar to co-investors in a joint venture. In this relationship,
the park owner provides investment in the site, utilities, and other amenities. The homeowner
provides concurrent investment in the mobilehome and its appurtenances. Both parties to this
relationship have obligations: The homeowner is obligated to pay rent and abide by the rules of
the park; the park owner is obligated to provide space amenities, and a safe and sanitary park.
The homeowner receives a location for his home investment and the park owner receives a return
on his park investment through space rent.
Where there is a shortage of available spaces, however, the park owner will have the upper hand
in the relationship. Even when there are other spaces available, the park owner may be able to
charge excessive rents because it is extremely expensive to move a "mobile" home. In these
situations, individual homeowners may have no choice-they must pay the rent demanded or lose
their entire investment.
A. Mobilehome Residency Law
In 1978, the state legislature enacted the California Mobilehome Residency Law (Cal.
Civ. Code Section 798 et seq.) (hereafter, "MRL"). The MRL limits the ability of a park
owner to terminate a mobile home owner's tenancy. In enacting the MRL, the legislature
commented that "because of the high cost of moving mobilehomes, the potential for
damage resulting therefrom, the requirements relating to the installation of mobilehomes,
and the cost of landscaping or lot preparation, it is necessary that the owners of
mobilehomes occupied within mobilehome parks be provided with the unique protection
from actual or constructive eviction afforded by the provisions of this chapter." (Civil
Code Section 798.55(a)).
The MRL limits evictions to cases which include the mobilehome owner's nonpayment of
rent, violation of law or park rules, or the park owner's desire to change the use of his
land (Civil Code Section 798.56). While a rental agreement is in effect, the park owner
generally may not require the removal of a mobilehome when it is sold (Civil Code
Section 798.73). The park owner may neither charge a transfer fee for the sale, (Civil
Code Section 798.72), nor disapprove of the purchaser, provided that the purchaser has
the ability to pay the rent and charges of the park unless the management reasonably
determines that, based on the purchaser's prior tenancies, he or she will not comply with
the rules and regulations of the park. (Civil Code Section 798.74).
The MRL also contains a number of detailed provisions affecting the amount of fees the
park owner may charge mobilehome owners, rules and regulations for park management,
and limitations on the content that may be included in rental agreements. None of the
MRL's provisions limits the amount of rent the park owner may charge. However, the
MRL makes express recognition of the applicability of local rent control laws to
agreements for tenancies of less than 12 months in duration.
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In the wake of the MRL, various communities in California adopted mobilehome rent
control ordinances. In Escondido, the voters approved Proposition K in 1988.
B. Proposition ,K
In the late 1970's and 1980's, Escondido mobilehome owners became concerned about
space rent increases and sought protection. In 1988, the rent protection initiative
(Proposition K) was placed on the ballot and approved by the voters of Escondido. The
initiative was designed to protect mobilehome residents from too frequent or unfair
increases, while providing an avenue for approval of the park owners' periodic need for
increases.
The City of Escondido's initial response to concerned tenants had been not to impose rent
control. Instead, the City encouraged homeowners and park owners to engage in
negotiations. These negotiations yielded a Mobilehome Park Accord Ordinance in 1983
(Escondido Ordinance No. 83-34) that established a mechanism for resolving disputes.
However, rents continued to escalate, as did frustrations, and a sufficient group of
residents became organized enough to promote an initiative measure. On June 8, 1988,
the voters of Escondido approved the initiative Ordinance (Proposition K) by a margin of
11,148 votes for to 7,850 against.
In a free market, a landlord may impose or increase rents on their property freely with
notice to their tenant. Under Proposition K, if a park owner wants to increase rent, he
must first obtain approval from the Mobilehome Park Rental Review Board. As
prescribed by the Ordinance, the Escondido City Council sits as the Rent Review Board.
To request an increase, the park owner must file an application with the City. Once a rent
increase application is determined to be complete, a notice of the application is mailed to
the affected homeowners. The homeowners have a right to submit written material in
response to the application, as well as appear at the public hearing. Normally the Board
must commence a hearing on a completed application within 60 days. At the hearing, the
park owner and the affected homeowners may offer any evidence that is relevant to the
requested rent increase. Following the hearing, the Board applies various factors and
"shall determine such rent increase as it determines to be just, fair and reasonable"
(Escondido Municipal Code Section 29-104(g)).
The nonexclusive list of factors is as follows: (1) changes in the Consumer Price Index;
(2) the rent charged for comparable mobilehome spaces in Escondido; (3) the length of
time since the last rent increase; (4) the cost of any capital improvements related to the
spaces at issue; (5) changes in property taxes; (6) changes in any rent paid by the park
owner for the land; (7) changes in utility charges; (8) changes in operating and
maintenance expenses; (9) the need for repairs other than for ordinary wear and tear;
(10) the amount and quality of services provided to the affected tenant; and (11) any
lawful existing lease. (Escondido Municipal Code Section 29-104(g)).
The Board's determination is final and notice of its decision is mailed to the park owner
and the affected homeowners.
C. Administrative Procedures Under Proposition K
Over the past twenty (20) years, Escondido has developed and implemented various
administrative procedures and regulations to support the rent review hearing process as
prescribed by the Ordinance. The City's Community Services Department originally
monitored the Ordinance. During the early years, Rent Review Board hearing guidelines
and application forms were developed. The Guidelines spell out the staff review
requirements, the hearing process, resident notice requirements, policies governing the
Board's review of the application, define capital improvements to be considered, and
require health and safety inspections of the parks as part of the hearing process.
Initially, internal City staff was responsible for analyzing and verifying financial
information that was submitted by the park owners in support of their requests for an
increase. This issue became one of the most difficult, as residents were extremely
concerned about the validity of the financial information being reviewed. On several
occasions through the years, the Board considered requiring audited financial statements
from the Parks, but rejected that requirement as a costly burden that would eventually be
passed on to the residents.
After several years of struggling with the difficult financial review of the applications, an
outside Certified Public Accounting firm was hired to analyze the applications and
prepare the staff report for the Rent Review Board. At that time, the administration of the
Ordinance was assigned to the City Clerk. This procedure, while somewhat more
effective as to the financial analysis of an application, did not provide an avenue to
consider other issues affecting the application or provide direct communication with the
park residents. As well, the Board continued to struggle with the various decision-
making formulas and guidelines, at one time considering analyses on all eleven factors of
the Ordinance, as well as several rate of return formulas, before making a decision.
Near the end of 1994, in part due to the amount of litigation involving the Ordinance, it
was determined to assign the administration of the application and hearing process to the
City Attorney's office. At that time a full-time staff person was hired to analyze
application increase requests and coordinate the administration of the Ordinance. During
that transition, additional and more specific guidelines for financial analysis and review
were considered and adopted by the Rent Review Board. While continuing to consider
the various factors of the Ordinance, the Board identified two specific formulas to use for
rate of return analysis and began contracting with outside consultants for preparation of
those analyses when it is considered appropriate.
In keeping with the improved guidelines over the past two years, staff and the outside
economic consultants have made more specific recommendations to the Board based on
the residents' input and the review and financial analysis of the park owner's application
and request.
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In 1997, the Board adopted changes to the Guidelines that allow for a short-form
application that focuses on the change in the Consumer Price Index (CPI). The short-
form process is discussed more fully in Section E. Since 1997, the Board has held
hearings on one hundred and eighteen (118) separate applications, one hundred eight
(108) of which were short-form hearings.
By 2006, the use of short form had become routine and litigation involving the validity
of the Ordinance had all but vanished. Administration of the rent control program was
moved from the City Attorney's Office to the City's Housing Division. The program is
still supported and administered by a full time employee, but with the support and
assistance of the entire Housing Division.
D. Vacancy Control/Decontrol
The subject of "vacancy control" is simply whether or not rents are regulated for a
mobilehome space that is vacant. Park owners have frequently argued for the ability to
raise rents to market levels, free from rent control, any time a space became vacant. A
main argument in favor of doing this was that raising rents for a vacant space did not
harm any existing tenant, and any new tenant did not have to accept the rental
arrangement if the price was too high.
During the early 1990's, the City applied Proposition K as including vacancy control.
However, early in 1996, the Fourth District Court of Appeal determined that the
Escondido Rent Protection Ordinance did not intend to protect prospective purchasers of
mobilehomes and therefore, does not have vacancy control. (Thomsen v. City of
Escondido, 4th Dist. Ct. of App. No. D025853). Subsequent City appeals of that decision
were unsuccessful.
In an attempt to neutralize the effects of the courts' decisions on future mobilehome
tenants, the City Council placed an initiative, Proposition O, on the ballot in November of
1996. Proposition O would have clarified that the language of the rent control measure
applied even upon a vacancy. The initiative would have also reinstated the City's ability
to monitor long-term leases. That Proposition failed by a vote of 15,368 against to
14,093 in favor.
In November of 1998, the Council again placed an initiative, Proposition T, on the ballot
that would have reinstated vacancy control in the City. That measure also failed by a
vote of 13,064 against to 12,647 in favor. Therefore, at the present time, park owners in
the City may increase the base rent to new tenants coming into their parks in any amount
they determine to be appropriate.
E. Short-Form Application Process
Because of the lengthy and contentious rent hearings, as well as large increases that
sometimes occurred under the long-form type of hearing process, a mobilehome task-
7
force was formed during the fall of 1997 to study the possibility of creating a short-form
hearing process. After a series of meetings, guidelines were developed and a short-form
hearing process was adopted by the City Council in December 1997. Since the rent
control initiative can only be amended by a subsequent initiative under California law,
the guidelines were developed to apply and implement rent increases within the
parameters of Proposition K. Notice and public hearings are still required. All of the
factors must be considered, but the focus is on CPI: to qualify for a short-form hearing, a
park owner may only request up to 75% of the change in the Consumer Price Index
("CPI") for a maximum of a two-year period.
From the inception of the Short-form process, 96 applications have been approved. Short
form hearings are popular with park owners because certain fees are waived and there is
substantially less administrative burden associated with the process. Both owners and
residents benefit because as a rule, the public hearings associated with the short-form
applications are considerably shorter and less controversial. While short form processes
have produced smaller rent increases, the adjustments occur more frequently and
residents are not faced with large increase requests covering several years.
F. Long-Term Leases
The California Mobilehome Residency Law exempts rental agreements in excess of 12
months duration that meet specific requirements from rent control (California Civil Code
Section 798.17). Therefore, local mobilehome park tenants entering into lease
agreements for more than 12 months are not subject to the Escondido Rent Protection
Ordinance.
Perhaps inevitably, after passage of Proposition K, disputes arose whether mobilehome
park owners could require residents or prospective residents to sign long-term leases that
were exempted from rent control under Civil Code Section 798.17. In August 1988, the
City Council enacted Ordinance No. 88-50, prohibiting mobilehome park owners from
requiring either existing or prospective homeowners to enter into long-term leases that
were exempt from rent control.
A 1990 legislative amendment to Civil Code Section 798.17 (SB 2009) appeared to
permit mobilehome park owners to require prospective homeowners to sign long-term
leases that were exempt from rent control. In response, Escondido repealed Ordinance
No 88-50. However, SB 2009 was short-lived. In 1991, by further amendment to Civil
Code Section 798.17, the Legislature repealed SB 2009 with the intent to reinstate state
law existing before enactment of such bill to avoid any unintended preemption effect.
Escondido's City Council then adopted as an urgency matter, Ordinance No. 91-19,
essentially reenacting Ordinance No. 88-50. Ordinance 91-19 was later "codified" by
Ordinance 94-22.
But in May of 1995, the Fourth District Court of Appeal concluded that Ordinance No.
91-19 constituted an improper "legislative" amendment by the City Council of a
municipal initiative Ordinance adopted by the voters ( Mobilepark West Homeowners
8
Assn. v. Escondido Mobilepark West, 35 Cal.AppAth 32 (1995)). The Court also held
that with respect to existing homeowners, Ordinance No. 91-19 was preempted by Civil
Code Section 798.17, which covered conditions on the right of a park owner and existing
homeowners to enter into rent control-exempt leases. When the court invalidated
Ordinance 91-19, it therefore invalidated Ordinance 94-22, because they were both the
same ordinance.
VI. LITIGATION HISTORY
Litigation resulting from the adoption of rent control in Escondido has been lengthy and
complex. At one point, litigation status reports on lawsuits related to mobilehome rent control
showed approximately forty-one (41) litigated mobilehome cases!
As noted earlier, the voters of the City of Escondido enacted Proposition K on June 8, 1988. The
very next day, two mobilehome park owners brought suit against the City seeking a declaratory
judgment that certain provisions of Proposition K were illegal, seeking a preliminary injunction
against its enforcement, and requesting attorney fees and costs.
Certain park owners also took the position that they might be able to avoid rent control by
requiring any purchaser of a mobilehome to sign a long-term lease, because certain long-term
leases are by state law exempt from local rent control ordinances. The City adopted Ordinance
No. 88-50 as an urgency ordinance on August 11, 1988, to clarify Proposition K by indicating
that its protections extended to new and prospective tenants as well as existing homeowners. By
October of 1988, three park owners brought suit against the City seeking a declaration that
Ordinance No. 88-50 was preempted by or in violation of state laws.
In December of 1988, the first of the "Yee" cases (named after the first case, Yee v. City of
Escondido, San Diego Superior Court Case No. N42268) was filed claiming that Proposition K
and Ordinance No. 88-50 constituted a taking of the park owner's property under the state and
federal Constitutions. The theory of these cases was based on a panel decision of the United
States Court of Appeals for the Ninth Circuit in Hall v. City of Santa Barbara, 833 F.2d 1270
(9th Cir. 1996), cent denied, 485 U.S. 940, 108 S.Ct. 1120, 99 L.Ed.2d 281 (1988) that a
mobilehome rent control ordinance could constitute a taking of a park owner's property.
The Yee plaintiffs also attempted to seek review from the federal courts, and filed separate
lawsuits in the District Court for the Southern District of California.
Between May, 1989 and June, 1989, an additional eleven (11) Yee/Hall-type suits were filed, all
alleging that the Rent Protection Ordinance constituted a taking, and seeking damages and other
relief.
In October, 1989, another park owner brought suit against the City charging that because of the
alleged bias of three Board members, it could not receive a fair hearing on its application,
contending also that the failure of the Ordinance to provide for vacancy de-control was a
violation of due process, and seeking damages. Yet another park owner sued in December of
1989, alleging that the failure of the Ordinance to permit vacancy de-control was a violation of
9
due process and seeking damages. A third park owner filed a similar lawsuit in U.S. Bankruptcy
Court in November 1989.
Additionally, in December of 1989, two park owners brought Writs of Mandate against the City
challenging the amount of rent increases given to them by the Board as an insufficient rent
increase and also challenging the rent rollback provisions of Proposition K.
The Yee/Hall cases were ultimately consolidated and resolved by the United States Supreme
Court in its landmark decision Yee v. City of Escondido, 503 U.S. 519, 112 S.Ct. 1522, 118
L.Ed.2d 153 (1992) which was handed down on April 1, 1992.
While the United States Supreme Court made it absolutely clear that the Rent Protection
Ordinance could not be viewed as a physical taking of a park owner's property, the Court's
opinion indicated the possibility that a challenge could be based on a regulatory taking theory
under the Fifth Amendment. Two park owners promptly sought to pursue this avenue by filing
additional lawsuits in both state courts and federal courts. These were ultimately dismissed.
The City has prevailed on every single case challenging the basic framework of the Ordinance
and challenging the Ordinance under the Fifth Amendment to the United States Constitution.
Ordinance No. 88-50 was invalidated as being preempted by state law, and in a 1995 case, the
courts determined that the Rent Protection Ordinance provided for vacancy de-control, which
enabled park owners to raise space rents to market levels when a space became vacant. The
City has also experienced mixed results in cases challenging the amount of rent increase given
by the Board, generally losing the earlier cases but winning most cases filed later.
In recent years, only two litigated cases have involved mobilehome rent control. Neither case
challenged the basic framework of rent control, but rather, both cases were based on the park
owner's dissatisfaction with the final decision of the Board. Such cases tend to be difficult,
because the court process and the possibility of a remand from the court to the Board for a new
hearing can take several years. The Board, residents, and park owners face the very difficult
task of making a correct decision on the prior rent increase application, all the while
considering current economic factors and an appropriate level of current rent.
VII. MOBILEHOME PARK LIVING CONDITIONS ISSUES
Many of the common problems found in mobilehome parks are related to health and safety
issues that are governed by the California Civil Code, Title 25 of the California Health and
Safety Code state regulations and local regulations. Ongoing issues include street lighting, tree
removal and trimming, driveway maintenance and lot-line issues. Additionally, residents may
have landlord/tenant problems that often fall under federal and state fair housing laws.
A. LOT LINE ISSUES
Lot line issues may arise when a new home is moved in on a space. If lot lines need to be
moved, the City follows procedures provided in Title 25. The City's Code Enforcement
Division monitors new home set-ups and performs the building permit inspections. The
10
City of Escondido does an on-site physical inspection prior to issuing permits for new
set-ups and accessory structures to assure that the lot lines are set correctly.
B. TREE AND DRIVEWAY MAINTENANCE
Disputes often arise between Mobilehome park residents and Park owners as to the
responsibility of fixed improvements on the rental spaces, especially in regards to large
trees and driveways. The California Department of Housing (HCD) in its "Forest
Gardens" opinion of December 14, 1992 (revisited August 10, 1993) stated that HCD's
`policy' has been "to require the mobilehome owner who planted the tree to be
responsible for maintaining it and subsequent problems the tree might cause (e.g. damage
to driveways), but the subsequent occupants of the same space can demand that the
mobilehome Park management perform such maintenance." However, the HCD opinion
goes on to state that through a lease or rental agreement, a resident can contractually
agree to perform maintenance which is initially the Park owner's responsibility.
Generally, the maintenance responsibility of these fixed improvements is spelled out in a
park's rental agreement and resolution of disagreements is governed by the agreement.
These types of repairs can be costly and beyond the financial ability of many residents.
Several attempts have been made at the state level to introduce legislation that would
shift the responsibility for the maintenance of capital items within a mobilehome park to
the park owner. Legislation was passed in the fall of 2000 that requires Park
management, not mobilehome owners, to be responsible for paying costs of removing or
trimming Park-owned trees and the repairing of driveways where there is a health and/or
safety issue involved. As of January 1, 2001, AB 862 went into effect; stating Park
management will have the sole responsibility for trimming, pruning, and removing any
tree which poses a health and safety hazard. (Section 798.37.5 of the Mobilehome
Residency Law). Park management will not be able to "pass on" responsibility for tree
maintenance to tenants of an individual space, unless an applicable long term rental
agreement is in effect beyond January 1, 2001. Once it is determined that tree
maintenance is required to correct a health and safety violation, there is nothing in the
legislation which prevents a Park owner from cutting down the entire tree to avoid future
maintenance issues. Section 798.37.5 ( c ) states "Park management shall be solely
responsible for the maintenance, repair, replacement, paving, sealing, and the expenses
related to the maintenance of all driveways installed by park management including, but
not limited to, repair of root damage to driveways and foundation systems and removal.
Homeowners shall be responsible for the maintenance, repair, replacement, paving,
sealing, and the expenses related to the maintenance of a homeowner installed driveway."
C. STATE MANDATED INSPECTIONS
The City of Escondido contracts with the State of California Department of Housing and
Community Development ("HCD") to inspect the parks and the exterior of the homes in
the parks for State code compliance which is required by law every eight years.
Additionally, each time a park files a rent increase application, the park must submit to an
inspection of its common areas. Any health and safety-related violations found in the
11
common areas of a park must be corrected before any rent increase granted by the Board
may be implemented.
D. CAPITAL IMPROVEMENTS
The City has enacted an Ordinance that clarifies residents' rights regarding capital
improvements. Ordinance No. 90-12 prohibits a park owner from requiring the
installation of capital improvements on a space as a condition of residency in a
mobilehome park by an existing or prospective tenant. The Ordinance defines capital
improvements as driveways, garages, sheds, curbs, gutters, sidewalks, or any other
improvement that results in permanent alteration to the property and that is not subject to
removal, or that is not removable at the time the tenancy in the mobilehome park
terminates.
E. PUBLIC UTILITIES ISSUES
The Public Utilities Commission ("PUC") regulates the rates that submetered
mobilehome parks may charge their space tenants for gas and electric service. In 1997,
the PUC confirmed that its ruling applies to a mobilehome park which is subject to rent
control and ruled that to the extent that a rent commission had ordered a rent increase to
cover the cost of replacing a submetered natural gas system, the rent commission was
impermissibly intruding into the jurisdiction of the PUC. Adhering to the PUC
regulation, the Escondido Rent Review Board's decision to withhold a requested capital
improvement rent increase from Lake Bernardo Mobile Estates to recover expenditures
on improvements to its submetered gas and electric system was upheld by the courts in
Rainbow Disposal Company Inc., v. Escondido Mobilehome Rent Review Board, 64
Ca1.App.4th 1159, 1165-70 (1998).
The PUC has investigated mobilehome parks and other multiple residential units with
submetered water and sewer systems, after receiving complaints that tenants had been
overcharged, and a preliminary investigation discovered that several complexes were
over charging for water and sewer service. The City of Escondido has addressed this
subject with Ordinance No. 89-39, which regulates water charges by master meter users
in multi-dwelling residential environments. The Ordinance prohibits providers of water
services to tenants of a mobilehome park, or similar residence complexes, from imposing
a surcharge that exceeds the rate set by the City which would apply if the user were
receiving such service directly, except as approved by application to the City.
F. LANDLORD/TENANT ISSUES
There are often tenant/landlord-related issues that fall outside the jurisdiction of the City
that may eventually require mediation or civil litigation action between the parties to
achieve resolution. Most such issues are related to the implementation and/or
enforcement of rules and regulations in the park or eviction procedures. The City
contracts with the Center for Social Advocacy, and often refers residents with landlord
problems and/or fair housing issues to the center.
12
When residents contact City staff about issues over which the City has no jurisdiction,
they are referred to the Center for Social Advocacy which offers free services covering mediation of
housing disputes, discrimination monitoring and low-cost rental listings. Their trained counselors can
answer questions about rental agreements, deposits, repairs, rules, eviction and fair housing law. The
counselor that receives a call may direct the party to the appropriate resource within the organization,
supply the resident with any forms required for mediation services or discrimination monitoring, contact
a landlord on behalf of the resident or arrange a meeting between the parties if appropriate.
VIII. CHANGING DEMOGRAPHICS
Many of the fundamental demographics which existed in Escondido when mobilehome rent control
was adopted in 1988 have changed significantly. In 1988, there were 29 mobilehome parks in
Escondido but over time, the Pinetree, Palomar, and Hidden Vale parks were closed and replaced with
permanent housing projects and commercial development, reducing the total number of mobilehome
spaces from about 3631 in 1988 to about 3465 in 2006. In 2006, two other parks, Bellview and
Mobile Haven went through the process of resident relocation in contemplation of being replaced by
permanent affordable housing projects. Bellview was replaced by Las Ventanas Village, an
affordable family rental community which began accepting applications for tenancy in January of
2008. Mobile Haven is scheduled to be replaced by a senior affordable housing rental project.
As park owners implemented vacancy decontrol, adapted to short form, purchased spaces, and utilized
long form leases, the number of spaces subject to mobilehome rent control has dropped dramatically.
In 1988, approximately 2749 spaces were subject to the Rent Protection Ordinance, however by 2008,
that number has dropped to 1603, with corresponding increases in the number of spaces under
vacancy decontrol, long term leases, or park ownership.
13
Background:
At its meeting of May 5, 2010, the City Council directed staff to investigate the cost and allocation of staff
time related to implementation of an ordinance regulating mobile home park rents. The City Attorney was to
evaluate possible ordinance options, with city staff providing the administrative cost estimates for those
options under consideration.
The City Attorney has completed a staff report outlining three options for Council's consideration. These
options have been analyzed by the City Manager, on a cursory basis.
Discussion:
A chart outlining anticipated expenditures (to the extent they can be predicted) has been attached. Costs
have been estimated based on other similar work equivalents to tasks that city staff is currently assigned.
There is no capacity available in current or projected FY 2010/2011 city staffing to complete the work
necessary to implement and conduct an ordinance for either the Santa Rosa or Lake County model outlined
by the City Attorney. New personnel and capacity would have to be added, or the work contracted out, if
either of these models were adopted.
The program manager for mobile home rent control in Santa Rosa was contacted with regard to costs of
that program. The City of Santa Rosa has an Housing Authority budget of $21 M. A division of the Housing
Authority which covers the rent control and other housing administrative has a budget of about $566,340,
with 2 employees assigned as part of other tasks to the mobile home rent control activity. One of these
employees provides management oversight to the employee who actually conducts the program. If there is
no activity under the ordinance, the cost of the program annually is estimated to be about $20,000. If there
is activity under the ordinance, expenditures are made to conduct the work. Santa Rosa staff could not
estimate costs for activity as it would be dependent upon the time necessary to address a given process
outlined in the ordinance. Santa Rosa has 2008 mobile home park spaces, in 14 parks.
Continued on Paae 2
Recommended Action(s): Review and Discuss administrative costs outlined herein with regard to
mobile home rent control ordinance options. Provide further direction to staff as appropriate
Alternative Council Option(s):
Citizens advised:
Requested by:
Prepared by: Jane Chambers
Coordinated with: David Rapport, City Attorney
Attachments: Ball Park Estimates of Costs Associated with Mobilehome Park Rent Control
Ordinance
Approved: -
J Chambers, City Manager
Current City Staff could implement and conduct the appointment and administration of a commission as
outlined in the Merced option. Other current assignments would need to be modified and/or eliminated to
provide the capacity for this work. Once implementation had been achieved, staff would not be necessary
until a hearing is required under the ordinance, and then would need to be available as required by the
commission to resolve the issue brought forward.
There currently exists an oversubscription of administrative support for existing commission activities, an
issue that has been discussed with Council on previous work shop sessions. The proposed FY 2010/2011
budget has been constructed with further reduction of administrative support capacity in order to reduce
general fund expenditures. If a commission were established for mobile home rent control, administrative
work in support of other commissions could be modified to allow staff availability to this new commission.
This new commission would meet only as required to enforce the ordinance (on a complaint basis).
Fiscal Impact:
As the City Council is aware, there already exists a deficit in the City's General Fund, so that it may be
impractical to spend funds from that source in support of implementing and conducting a mobile home rent
control ordinance. The City does conduct activities in support of low income and affordable housing,
through both its CDBG and Redevelopment funds. It may be possible to use these funds in support of a
mobile home rent control ordinance, but that would defer funds from other projects and activities currently in
place. The best alternative for funding the administrative costs would be to have these costs fully supported
by those who benefit directly, the mobile home park residents.
In the case of both the Santa Rosa and Lake County ordinances, baseline costs on an annual basis could
be in the range of that expended in Santa Rosa, once the work of establishing and implementing the
program was complete. A significant unknown is the cost of arbitration and litigation that could be
associated with any of the Ordinances proposed.
Another means of handling the administration of any of the Ordinances would be to establish a new position
for housing project and administration, and have that work be a part of the new position's duties. City staff
had planned to explore this concept sometime in the new fiscal year, to see if some further collaborative
work could be arranged with another public agency in order to bring new housing planning, research,
development, and expertise to the valley area, or county. Current revenue constraints and uncertainties
prohibited the proposal of such a position for the FY 2010/2011 fiscal year.
Budgeted FY 09/10 F-1 New Appropriation ❑X Not Applicable F-1 Budget Amendment Required
Amount Budgeted Source of Funds (title and Account Number Addit. Appropriation Requested
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June 2, 2010
SUBJECT: AWARD BID FOR THE CONSTRUCTION OF THE UKIAH SKATE PARK TO GEOCON
ENGINEERING, INC. IN THE AMOUNT OF $666,320.24 AND APPROVAL OF
CORRESPONDING BUDGET AMENDMENTS.
Background & Discussion: After detailed review, the Council approved the plans and specifications No.
10-02 for the Ukiah Skate Park at the April 7t" 2010 meeting. Direction from Council was to release a bid
structured in a way to allow for the award of a base bid with a number of additive elements that could be
awarded if funding was available. Bids were opened May 18, 2010, with five qualified bids being received;
see Attachment #1 for bid tabulations.
GeoCon Engineering, Inc. was the lowest responsive and reliable bidder as outlined in the bid
specifications. SHN Consulting contacted seven references listed on GeoCon Engineering, Inc.'s
Statement of Experience and three references listed on Dees-Hennessey, Inc. Statement of Experience. In
reviewing the responses and their direct conversations with several of the representatives, there was no
indication of any challenges with either contractors' work on past similar projects.
After review of the responses, staff recommends awarding the base bid and Additive Alternates 1-4 to
GeoCon Engineering, Inc. The base bid plus the four additive alternates totals $666,320.24.
Staff does not recommend awarding Additive Alternates 5-7 at this time for the following reasons:
® Additive Alternate No 5 - Parking Lot Overlay; Thompson Family and Valley Paving has offered to
donate the labor portion of installation of an asphalt overlay. It is estimated the material portion is
around $20,000.
® Additive Alternate No 6 - Clearing and Grubbing; North Counties Development has volunteered to
complete this work.
Recommended Action(s): Award base bid and additive alternates 1-4 for the construction of the Ukiah
Skate Park to GeoCon Engineering, Inc in the amount of $666,320.24 and approval of corresponding
budget amendments.
Alternative Council Option(s):
(1) Reject bids and provide alternate direction to Staff. (2) Reject bid from GeoCon Engineering and
select the next lowest responsive bidder; or (3) Award bid to GeoCon Engineering with different additive
alternates.
Citizens advised: Ukiah Skate Park Committee
Requested by: n/a
Prepared by: Guy Mills, Project & Grant Administrator
Coordinated with: Jane Chambers, City Manager, Mary Horger, Purchasing Supervisor, and Sage
Sangiacomo, Assistant City Manager
Attachments: Bid Tabulation Sheet
Approved:
Jr e/Chambers, City Manager
Subject: Skate Park Award of Bid
Meeting Date: June 2, 2010
Page 2 of 2
Additive Alternate No 7 - Restroom Facility; This item was cost prohibitive to undertake as solicited
(modular unit). Staff believes that either contract or volunteer labor to build the unit on site is the
best approach. The Skate Park Committee is currently soliciting labor and material donations to
complete this portion of the project. Donations secured to date include: roof framing, installation of
block walls, roofing, painting, aggregate base material, and labor to install electrical and plumbing. If
the committee is unsuccessful in obtaining volunteer design services, staff will begin the process to
obtain contract services.
Funds available for this project include:
California State Parks Grant $ 418,584
County of Mendocino Contribution $ 70,000
Prop 40 Per Capita Funds $ 58,333
Community Fundraising $ 234,809
Depot lease contribution $ 34,900
Total: $ 816,626
Funds from California State Parks, County of Mendocino, and Prop 40 Per Capita will require the City to
expend cash and await reimbursement as the project progresses or at project close-out. Staff will work to
ensure that timely requests are submitted for reimbursement.
Additional costs for this project included the remaining contract services with Wormhoudt, Inc. and SHN
Consulting Engineers & Geologists, Inc. for inspections, testing and construction management. Staff is
budgeting a 10% construction contingency bringing the total cost to $797,952. Total revenue exceeds
expenses by $18,674 which will be used to fund a portion of Additive Alternate No. 5 and No. 7, as well as
expenses for landscaping, park signage, donor wall and benches.
Fiscal Impact:
® Budgeted FY 09/10 New Appropriation
Source of Funds (title and
Park Development Skate Park
Skate Park Donations/Matching
Skate Park State Grant
Skate Park Depot Lease
Skate Park -County of Mendocino
Skate Park - Prop 40 Per Capita
Not Applicable
Account Number
140-6050-800-005
140-0900-900-006
140.0600.490.006
TBD
TBD
TBD
® Budget Amendment Required
Addtl. Aoarooriation Reauested
$813,956
$232,139
$418,584
$ 34,900
$ 70,000
$ 58,333
ATTACHMENT
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June 2, 2010
SUBJECT: CONSIDERATION AND ADOPTION OF REVISIONS TO THE INVESTMENT POLICY
OF THE CITY OF UKIAH
Background: The investment policy was last revised October 1, 2008. The policy calls for an annual
review.
Discussion: PFM, the City's investment advisor, has reviewed the City's policy and has proposed a few
revisions. Attached are the proposed changes.
Fiscal Impact:
Budgeted FY 09110 L-J New Appropriation 1 7X Not Applicable 1-1 Budget Amendment Required
Amount Budgeted Source of Funds (title and Account Number Addit. Appropriation Requested
Continued on Page 2
Recommended Action(s): Approve the proposed revisions of the investment policy.
Alternative Council Option(s): Revise the recommendations and approve a revised policy.
Citizens advised:
Requested by: Jane Chambers, City Manager
Prepared by: Linda Brown, Executive Assistant to the City Manager
Coordinated with: Gordon Elton, Finance Director; Nancy Jones, PFM Asset Management LLC
Attachments: Proposed Policv
Approved: Ooel~ e:::~
J Chambers, City Manager
CITY OF U IAH
STATEMENT OF INVESTMENT POLICY
^r 'Inno
une 2010
1. PURPOSE
The purpose of this document is to establish and organize investment policies, which will
govern the investment activities of the City of Ukiah.
11. SCOPE
This investment policy covers all the City's surplus funds and investments (except
retirement funds and bond proceeds) and investment activities under the direction of the
City. Investment of bond proceeds will be f FtheF r-estFiGtedgoverned by the provisions of
relevant bond documents.
The investment policies of the City of Ukiah are based on state law and prudent money
management practices. All funds will be invested in accordance with this Investment Policy
and applicable California Government Codes, including § 53601 et seq.
III. OBJECTIVES
The primary objectives of the City, in order of priority, shall be:
1) Safety: Safety of principal is the foremost objective of the investment program.
Investments of the City shall be undertaken in a manner that seeks to ensure
preservation of capital in the portfolio.
2) Liquidity: The investment portfolio of.the City will remain sufficiently liquid to
enable the City to meet its cash flow requirements.
3) Yield: The investment strategy of the
investment return, considering current
parameters set forth by priorities (1) and
City shall be to earn a reasonable
market conditions, and within the
(2) above.
An adequate percentage of the portfolio shall be maintained in liquid, short-term securities
that can be converted into cash if necessary to meet forecasted disbursement
requirements. The portfolio shall also be appropriately diversified to avoid unreasonable
and avoidable risks regarding specific security types or individual financial institutions.
IV. POLICIES
Public Funds: It is the policy of the City of Ukiah to invest public funds in a
manner which will provide the maximum safety and liquidity, while earning an
investment return consistent with the objectives and parameters set forth by this
policy.
2. Prudent Investor Standard: Ukiah opeFat its investments PF09Fam s end°r fh°
Prudent investor Stan .,rrd which states-,Ukiah operates its investments program
under the Prudent Investor Standard, which states that the governing body of the
local agency or the persons authorized to make investment decisions on behalf of
the local agency are trustees, and, therefore, subject to the Prudent Investor
Standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling,
or managing public funds, a trustee shall act with care, skill, prudence, and
diligence under the circumstances then prevailing, including, but not limited to, the
general economic conditions and the anticipated needs of the agency, that a
prudent person acting in a like capacity and familiarity with those matters would
use in the conduct of funds of a like character and with like aims, to safeguard the
principal and maintain the liquidity needs of the agency.
3. Management Responsibilities: Management responsibility for the investment
program is delegated, for a one-year period, subject to annual review and
delegation, to the City Treasurer. The City Treasurer may further delegate day-to-
day management of the investment program to a professional external investment
advisor.
4. Internal Controls: A system of internal controls shall be established and
documented in writing by the Finance Director. The controls shall be designed to
prevent losses of public funds arising from fraud, employee error,
misrepresentation of third parties, unanticipated changes in financial markets, or
imprudent actions by employees and officers of the City of Ukiah. Controls
deemed most important include: minimization of opportunities for collusion,
separation of duties, separation of transaction authority from accounting and
recordkeeping, avoidance of bearer-form securities, specific limitations regarding
securities losses and remedial actions, written confirmation of all transactions,
minimizing the number of authorized investment officials, documentation of
transactions and strategies, and proper review and approval of brokerage
accounts and investment transactions.
5. Safekeeping, Custody, and Delivery: The City's investments shall be held in
safekeeping, in the name of the City of Ukiah, by a third party custodian bank.
Investment transactions shall be executed and settled using the "delivery vs.
payment" method.
6. Reporting: The City's Investment Advisor shall pFes ^gill send monthly
investment reports to the City Treasurer, who will present them to the Investment
Oversight Committee, Git er-and City Council
Required elements of the report will include type of investment, issuer, purchase
and maturity dates, rating, purchase price, par, current market value as of the date
2
of the report and the source of this valuation, and yield to maturity. These reports
shall include a list of all transactions during the past month.
On a quarterly basis, within 3o fellewiRg the eRd of the .YA AAA" e-r-,, the
Investment Advisor will deliver to the City Manager a guarterly portfolio review.
The City Treasurer will deliver this report to the -Investment Oversight Committee;
Gity T-Feasur°r _and City Council. The report ^n ®iciyes''' eRt rep94-whid;-will
provide data similar to the monthly report; this report will include (1) a statement
that the portfolio is in compliance with the policy or the manner in which the
portfolio is not in compliance and (ii) a statement denoting the ability of the City to
meet its expenditure requirements for the next six months, or provide an
explanation as to why sufficient money shall, or may, not be available. Deviations
from expectations shall be reported in a timely manner and shall include
recommendations for appropriate action to control adverse developments.
The Oversight Committee will meet at least once annually in order to conduct a
comprehensive review of the investment activities of the City so as to insure that
regulations are being adhered to and that strategies are being followed.
7. Conflict of Interest: In accordance with California Government Code sections
1090, et seq. and 87100, et seq., officers and employees of the City will refrain
from any activity that could conflict with the proper execution of the investment
program or which could impair their ability to make impartial investment decisions.
All investment personnel shall comply with the reporting requirements of the
Political Reform Act, to include the annual filing of Statements of Economic
Interest.
8. Return on Investment: The City's investment portfolio shall be designed to attain
a market-average rate of return through economic cycles. The Investment
Oversight Committee will measure the portfolio against an appropriate benchmark.
9. Annual Review of Policy: The Investment Advisor shall annually render to
thereview the Investment Policy annually and provide the City Manager and City
Treasurer with recommendations if any are needed. The City Treasurer will
present the Policy, and any recommended changes, to the Investment Oversight
Committee and City Council., y TF r ;d -the invest °ent Ove "R
Ce, +ttee a Statement o esment Peligy-, Council will c-la-s#ael
d areview the Policy and recommended changes at a public meeting.
meeting.
V. AUTHORIZED INVESTMENTS
Generally, investments shall be made in the context of the Prudent Investor Standard The
City is further governed by applicable California Government Codes, including sections
53600 and 53601 et seq. Within the context of these regulations, the following investments
are authorized, and further limited herein:
(a) Ukiah Bonds: Bonds issued by the City of Ukiah, including bonds payable solely
out of the revenues from a revenue-producing property owned, controlled, or
operated by the City or by a department, board, agency, or authority of the City.
(b) .S.Treasury Obligations: United States Treasury notes, bonds, bills, or
certificates of indebtedness, or those for which the full faith and credit of the
United States are pledged for payment of principal and interest.
(c) California State Obligations: Registered state warrants or treasury notes or
bonds of this state, including bonds payable solely out of the revenues from a
revenue-producing property owned, controlled, or operated by the state or by a
department, board, agency, or authority of the state.
(d) Non-California State Obligations: Registered treasury notes or bonds of any of
the other 49 United States in addition to California, including bonds payable solely
out of the revenues from a revenue-producing property owned, controlled, or
operated by a state or by a department, board, agency, or authority of any of the
other 49 United States in addition to California.
(f) Federal Agency or Government Sponsored Enterprise Obligations: Federal
agency or United States government-sponsored enterprise obligations,
participations, or other instruments, including those issued by or fully guaranteed
as to principal and interest by Federal Agencies or United States Government
Sponsored Enterprises.
(g) Bankers' Acceptances: Bills of exchange or time drafts issued by domestic or
foreign banks, which are eligible for purchase by the Federal Reserve System, the
short-term paper of which is rated in the highest category by a nationally
recognized statistical-rating organization (NRSRO). Purchases of bankers'
acceptances may not exceed 180 days maturity or 40% of the portfolio, and no
more than 10% of the portfolio may be invested in the banker's acceptance of any
one commercial bank.
4
(h) Commercial Paper: Commercial paper of "prime" quality of the highest ranking
or of the highest letter and number rating as provided for by a nationally
recognized statistical-rating organization. The entity that issues the commercial
paper shall meet all of the following conditions in either paragraph (1) or
paragraph (2):
(1) The entity meets the following criteria: (a) is organized and operating in
the United States as a general corporation; (b) has total assets in excess of five
hundred million dollars ($500,000,000); and (c) has debt other than commercial
paper, if any, that is rated "A" or higher by an NRSRO.
(2) The entity meets the following criteria: (a) is organized within the United
States as a special purpose corporation, trust, or limited liability company; (b) has
program-wide credit enhancements, including, but not limited to, over
collateralization, letters of credit or surety bond; and (c) has commercial paperthat
is rated "A-1" or higher, or the equivalent, by an NRSRO.
Eligible commercial paper shall have a maximum maturity of 270 days.
Purchases of commercial paper may not exceed 25 6e I/o of the City's
portfolio. The City may purchase no more than 10-p~ °lo of the outstanding
commercial paper of any single issuer. No more than 10% of the portfolio may be
invested in commercial paper of any one institution.
(i) Negotiable Certificates: Negotiable certificates of deposit or deposit notes
issued by a nationally or state-chartered bank, a state or federal savings and loan
association , or a state-licensed branch of a foreign bank provided that the senior
debt obligations of the issuing institution are rated "A" or better by an NRSRO.
Purchases of negotiable certificates of, deposit may not exceed 30% of the
portfolio, and no more than 10% of the City's portfolio may be invested in any one
financial institution.
Q) Repurchase Agreements: The City may invest in repurchase agreements with
banks and dealers with which the City has entered into a master repurchase
agreement. The maturity of repurchase agreements shall not exceed 365 days.
The market value of securities used as collateral for repurchase agreements shall
be valued at 102% or greater of the funds borrowed against those securities at all
times and shall be monitored daily by the investment staff. In order to conform
with provisions of the Federal Bankruptcy Code, which provide for the liquidation
of securities held as collateral for repurchase agreements, the only securities
acceptable as collateral shall be direct obligations of the United States or any
agency of the United States as described in §V of this policy.
In addition, the City may enter into repurchase agreements only with "primary
dealers" as designated by the Federal Reserve Bank of New York. All securities
5
underlying Repurchase Agreements must be delivered to the City's custodian
bank (delivery vs. payment) or be handled under a properly executed "tri-party"
repurchase agreement. The market value must be recalculated each time there is
a substitution of collateral. The City or its trustee shall have a perfected first
security interest under the Uniform Commercial Code in all securities subject to
Repurchase Agreement.
(k) Reverse Repurchase Agreements: The City may invest in reverse repurchase
agreements only with "primary dealers" with which the City has entered into a
master repurchase agreement contract. The City may invest in reverse
repurchase agreements with the following conditions:
Reverse repurchase agreements may be used only after prior approval of the City
Council. The City may only use reverse repurchase agreements to (1) cover a
temporary cash shortage, or (2) augment earnings. Reverse repos may not be
used to leverage the portfolio. In addition:
If a reverse repurchase agreement is authorized, it may be utilized only if the
security to be sold on a reverse repurchase agreement has been owned and fully
paid for by the City for a minimum of 30 days prior to the sale; the total of all
reverse repurchase agreements on investments owned by the City does not
exceed 20% of the portfolio; and the agreement does not exceed a term of 92
days, unless the agreement includes a written codicil guaranteeing a minimum
earning or spread for the entire period between the sale of the security using a
reverse repurchase agreement and the final maturity date of the same security.
The proceeds of the reverse repurchase agreement may not be invested in
securities whose maturity exceeds the term of the reverse repurchase agreement.
(1) Medium-term (Votes: The City may iriveal in all corporate and depository
institution debt securities with a maximum remaining maturity of five year or less,
issued by corporations organized and operating within the United States, or by
depository institutions licensed in the United States or any state and operating
within the United States. Notes eligible for investment shall be rated "A" or better
by an NRSRO. Purchase of corporate notes may not exceed 30% of the
portfolio, and no more than 10% of the corporate notes in the portfolio may be
invested in the same corporation.
(m) Money Market Funds: Shares of beneficial interest issued by diversified
management companies that are money market funds registered with the
Securities and Exchange Commission under the Investment Company Act of
1940. To be eligible for investment these companies shall either: (i) attain the
highest ranking or highest letter and numerical rating provided by not less than two
nationally recognized statistical rating organizations, or (ii) have an investment
advisor registered or exempt from registration with the Securities and Exchange
Commission with not less than five years experience managing money market
mutual funds with assets under management in excess of five hundred million
dollars ($500,000,000). The purchase price of shares of beneficial interest
purchased shall not include any commission that these companies may charge
and shall not exceed 20 °!o of the City's portfolio.
(n) Local Agency Investment Fund: The City may invest in the Local Agency
Investment Fund (LAIF) established by the State Treasurer for the benefit of local
agencies up to the maximum permitted under § 16429.1 of the Government Code.
Current maximum is $40-50 million.
(o) Time Deposits: The City may invest in non-negotiable time deposits that are
FDIC insured or fully collateralized in financial institutions located in California,
including U.S. branches of foreign banks licensed to do business in California. To
be eligible to receive local agency deposits, a financial institution must receive a
minimum overall "satisfactory for meeting the credit needs of California
Communities in its most recent evaluation. All time deposits must be
collateralized in accordance with the California Government Code § 53650, et seq.
Since time deposits are not liquid, no more than 25% of the cost value of the
portfolio may be invested in this category.
(p) Mortgage-Backed and Asset-Backed Securities: Any mortgage pass-through
security, collateralized mortgage obligation, mortgage-backed or other pay-
through bond, equipment lease-backed certificate, consumer receivable pass-
through certificate, or consumer receivable-backed bond of a maximum of five
years maturity. Securities eligible for investment under this subdivision shall be
issued by an issuer rated in a rating category of "AX or its equivalent by a
nationally recognized rating service and having an "A" or higher rating for the
issuer's unsecured debt, as provided by a nationally recognized rating service.
Purchase of securities authorized by this subdivision may not exceed 20% of the
agency's surplus money that may be invested pursuant to this section.
Credit criteria listed in this section refers to the credit quality of the issuing organization at
the time the security is purchased. The maturity limits are applied at the time of purchase.
VI. INELIGIBLE INVESTMENTS
The City may only invest in those obligations authorized by this policy. The City shall not
invest any funds in inverse floaters, range notes, or interest-only strips that are derived
from a pool of mortgages, or in any security that could result in zero interest accrual if held
to maturity. However, the City may hold prohibited investments until their maturity dates.
VII. PORTFOLIO LIMITS AND DIVERSIFICATION
Maximum Investment Maturity: Unless otherwise noted within this investment
policy, the City may not invest in a security with a maturity that exceeds five years
from the date of purchase. Investments which exceed five years in maturity
require authority granted by City Council before purchase. Written authority of the
City Council must be granted specifically or as part of an investment program no
less than three months prior to the date of purchase.
2. Maximum Portfolio Average Maturity: The target maximum average maturity of
the City's investment portfolio shall not exceed 2.5 years to control overall
exposure to interest rate risk.
3. Diversification: With the exception of obligations of the United States
Government and its Agencies, no more than 10% of the portfolio may be invested
in the securities of any single issuer.
Adopted on the 2nd day of OGtGbefJune, 2OW201 by the Ukiah City Council.
Signed:
Beni Thomas, s- P Mayor
Attest:
CkyC lak
10e
June 2, 2010
SUBJECT: ADOPTION OF POLICY ESTABLISHING ADVANCES MADE FROM THE SEWER
OPERATING REVENUE TO THE SEWER CONNECTION FEE FUND ARE LOANS AND
ARE INTENDED TO BE REPAID FROM FUTURE CONNECTION FEES.
Background: During the sewer rate discussions, the consultant identified the revenue projected from
sewer connection fees, for the next five years, is insufficient to meet the connection fee fund's annual debt
payment obligation. While this was not exactly new information, it did begin the discussion about funding the
shortfall. The rate study and resulting rate recommendations included a plan for ratepayers to provide the
funding until the connection fee revenue rises to the level necessary. The question not specifically
addressed in the rate study was the repayment to the ratepayers from future connection fee revenue. This
was discussed as it related to the rate recommendation and staff was directed to develop a policy statement
for future Council consideration.
The wastewater projects, for which the 2006 bonds funded, added capacity to the system as well as
updating the current operations of the system. The ability to add connections to the system was identified
as the source of funds to repay the bond costs apportioned to the capacity expansion. Furthermore, the
City Council and the Ukiah Valley Sanitation District Board of Directors agreed that the UVSD would receive
65% of the new connection capacity and the City would retain the remaining 35%. The expansion portion of
the debt would therefore be in the same proportions. As part of the assurances given to the bond
purchasers, the City committed to establish rates and charges sufficient to pay operating expenses, debt
payments, and an additional "coverage" amount of 20% of the debt payments. The UVSD accepted this
same obligation in a contract with the City. The result of this commitment is the revenue must come from
the sources controlled by the Council when the sources less controllable are insufficient. This means the
ratepayers supply the money to make the debt payment when connection fee revenue is less than needed.
Discussion: The current question relates to the obligation to repay the operating fund for the amounts
advanced from ratepayers. If the belief that the available connections will be sold eventually, is still valid,
adoption of a policy to outline a plan for repaying the amounts advanced is prudent. There are several
_ Continued on Page 2
Recommended Action(s): Adopt the policy as stated in this report establishing advances to the
City sewer connection fee fund from the City sewer ratepayers as loans that are to be repaid
as connection fees are received and interest will be added to the unpaid balance.
Alternative Council Option(s): Provide Alternative direction to staff
Citizens advised:
Requested by:
Prepared by: Gordon Elton, Finance Director
Coordinated with: Jane Chambers, City Manager
Attachments: None
_ e,~ 1-~
Approved: 9'~/
Ja Chambers, City Manager
Subject: Policy re Sewer Operating Revenue
Meeting Date: June 2, 2010
Page 2 of 2
components of such a policy, including: when the repayment will occur; will interest be added to the
amounts initially advanced; and what is done with the repaid funds.
Staff recommends that interest should be added to the amount to be repaid. The same amount of money
would generate income if it was received but not expended. Therefore the lost income should be replaced
by the benefiting fund.
Since connection fees were committed for debt payment, pay as you go capital projects should only be
funded from connection fees when the current debt obligation is paid and any previous loans, plus
applicable interest, are repaid.
The repaid funds should be deposited in the City Rate Stabilization Fund. Once deposited in the Rate
Stabilization Fund, they are available to meet any obligations of the enterprise as approved by the Council.
Recommended Policy
Purpose: Provide a mechanism for funding the City Capital Connection Fee Fund #620 obligation to make
semi-annual bond payments.
Policy
1) When the City Capital Connection Fee Fund #620 has insufficient resources to meet its debt payment
obligation, a loan will be made from revenue received from City ratepayers to eliminate the shortfall.
2) Interest will be added to the amount advanced from the time the advance is made until it is repaid.
3) Interest will be calculated at the monthly average yield to cost of the City's managed investment
portfolio.
4) The first obligation of money deposited, from any sources, in the City Capital Connection Fee Fund
#620, is to make the current year debt payments. The second obligation is to pay accumulated
interest on previous advances. The third obligation is to repay previous advances to the fund. Any
remaining funds are subject to use for Council approved projects and purposes. Council may make
exceptions to this hierarchy on a case by case basis or when emergency conditions exist.
5) Staff will present a report to the Council when funds are advanced to the City Capital Connection Fee
Fund #620. The annual budget will identify historic, projected and proposed transactions related to
this policy.
Subsequent Actions:
Policy resolutions are the routine method for establishing and memorializing ongoing policies.
After the Council approves, or amends, this policy, staff will prepare a policy resolution and return it
for Council adoption.
Staff suggests the Council send a request to UVSD to adopt this same, or a similar, policy for their
ratepayer subsidy of their connection fee fund.
Fiscal Impact:
7 Budgeted FY 09/10 ❑ New Appropriation 7 Not Applicable F-1 Budget Amendment Required
Amount Budgeted Source of Funds (title and Account Number Addit. Appropriation Requested
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SUBJECT: REVIEW OF EDWARD BYRNE MEMORIAL JUSTICE ASSISTANCE GRANT
(JAG) FORMULA GRANT FY201012011 APPLICATION
Background:
The JAG Grant FY 2010/2011 funding program provides federal funds to local jurisdictions in support of
addressing crime reduction and improving effectiveness. The JAG Formula grant allotments are based upon
jurisdictional population and crime statistics. The City of Ukiah has been allocated $13,361 in grant funding
for Fiscal Year 2010/2011.
Discussion:
Funding rules for the JAG grant application provide that the application be provided to the City Council for a
"Governing Board 30-Day Review Period" prior to submitting the application to the Department of Justice.
The entire application was provided to the City Council on May 6th 2010. The 30 day review period will end
June 6th, 2010, and the application will be submitted to the Department of Justice.
In addition to the 30 day review period, the Ukiah City Council is required to consider the application and
allow public comment of the application at a regularly scheduled City Council meeting. The purpose of this
Agenda Summary Report is to review the proposed JAG application with Council and allow the public an
opportunity to comment on the application.
Staff has proposed using the $13,361 in grant funding for the purpose of replacing eight SWAT team tactical
ballistic vests. Tactical ballistic vests provide a higher level of protection from firearms and are used to
increase officer safety and protection in high risk situations. The typical service life for these vests is 5
years. The vests the department has are over 15 years old, well past their serviceable life.
Fiscal Impact:
Budgeted FY 08/09 F-1 New Appropriation Not Applicable Budget Amendment Required
HFx~
Amount Budgeted Source of Funds (title and Account Number Addtl. Appropriation Requested
Continued on Page 2
Recommended Action(s): Review grant application; consider public input; and authorize staff to
submit the FY2010/2011 JAG grant application for consideration by the Department of Justice.
Alternative Council Option(s): Provide Staff with alternative direction.
Citizens advised:
Requested by: Chris Dewey, Director of Public Safety
Prepared by: Chris Dewey, Director of Public Safety
Coordinated with: Jane Chambers, City Manager
Attachments: FY2010/2011 JAG Grant Application
Approved:
J Chambers, City Manager
ITAC
TW. City Council Members
From: Chris Dewey, Director of Public Safety
:
May 6, 2010
Re: Federal Justice Assistance Grant Program
F l J! Formula Program Grant Application
City Council Members,
I have started the process of applying for the Federal Justice Assistance Grant. This
grant is a formula grant, based upon population and crime statistics, and will provide $13,361
in funding to the City of Ukiah for Fiscal Year 1012011.
The funding rules require that I provide the grant application to the City Council for a
"Governing Board 30-day review period" prior to submitting the grant application to the
Department of Justice. The grant has been scheduled for City Council consideration and
Public Comment at the June 2"d 2010 meeting, and must be submitted to DOJ for
consideration on June 3e, 2010.
Because of the time requirements associated with the Federal Justice Assistance
Grant, I am submitting this to the Council to begin the "Governing Board 30-day review
period" required by the grant. The Council is not required to comment on the grant funding
until our scheduled City Council meeting.
Please feel free to contact me at any time if you have any questions or concerns about
the application, and I look forward to presenting the grant application for your consideration
on June 2nd, 2010.
City of Ukiah, Ukiah Police Department
Program Narrative (Attachment 1)
Program Activity Funded: Tactical Ballistic Vest Purchase
Program Overview:
Tactical Ballistic Vests:
The JAG Formula Program funding will allow the department to purchase and
equip eight SWAT team officers with tactical ballistic protection vests.
Tactical ballistic protection vests are vital equipment for SWAT team members,
providing additional firearms protection in hostel SWAT environments. The vests
currently used by the SWAT team were purchased over 15 years ago, and are past their
serviceable life.
Program Objectives:
1. Increase SWAT officer safety in high risk situation by equipping officers
with tactical ballistic vests.
Organizational Tracking:
The City of Ukiah has developed a separate budget accounts for individual
grants, and will track costs and grant revenue within this account.
Organizational Activities, Timelines and Project Planning:
Staff has identified and tested the equipment being desired for purchase. Once
received, individual officers will receive departmental training on the new equipment and
deployment of the equipment will occur.
Performance Measures:
Obtain Equipment desired
Provide Department Training and Deploy Equipment
Quarterly Programmatic and Financial Reporting within 10 days of each
calendar quarter.
OMB APPROVAL NO. 1121-0186
EXPIRES 5-98 (Rev. 1197)
Budget Detail Worksheet
Purpose: The Budget Detail Worksheet may be used as a guide to assist you in the preparation of
the budget and budget narrative. You may submit the budget and budget narrative using this forrn or in
the format of your choice (plain sheets, your own form, or a variation of this form). However, all
required information (including the budget narrative) must be provided. Any category of expense not
applicable to your budget may be deleted.
A. Personnel _ List each position by title and name of employee, if available. Show the annual
salary rate and the percentage of time to be devoted to the project. Compensation paid for employees
engaged in grant activities must be consistent with that paid for similar work within the applicant
organization.
Name/Position Computation Cost
IPostition 1, each postition entry limited to one line
Position 2
1Postilion 3
IPostition 4
Postilion 5
Postition 6 (
SUB-TOTAL $0.00
13. Fringe Benefits - Fringe benefits should be based on actual known costs or an established
formula. Fringe benefits are for the personnel listed in budget category (A) and only for the
percentage of time devoted to the project. Fringe benefits on overtime hours are limited to FICA,
Workman's Compensation, and Unemployment Compensation.
SUB-TOTAL $0.00
Total Personnel & Fringe Benefits $0.00
OJP FORM 715011 (5-95)
Name/Position Computation Cost
C. Travel - Itemize travel expenses of project personnel by purpose (e.g., staff to training, field
interviews, advisory group meeting, etc.). Show the basis of computation (e.g., six people to 3-day
training at $X airfare, $X lodging, $X subsistence). In training projects, travel and meals for trainees
should be listed separately. Show the number of trainees and the unit costs involved. Identify the
location of travel, if known. Indicate source of Travel Policies applied, Applicant or Federal Travel
Regulations.
Purpose of Travel Location Item Computation Cost
Travel entry 1, two tines per entry
Travel entry 2
F
entry 3
Travel entry 4 ~
Travel entry 5
Travel entryry6
IL
Travel entry 7
1
1 i
TOTAL $0.00
A Equipment - List non-expendable items that are to be purchased. Non-expendable equipment
is tangible property having a useful life of more than two years and an acquisition cost of $5,000 or
more per unit. (Note: Organization's own capitalization policy may be used for items costing less than
$5,000). Expendable items should be included either in the "supplies" category or in the "Other"
category. Applicants should analyze the cost benefits of purchasing versus leasing equipment, espe-
cially high cost items and those subject to rapid technical advances. Rented or leased equipment costs
should be listed in the "Contractual" category. Explain how the equipment is necessary for the success
of the project. Attach a narrative describing the procurement method to be used.
Item Computation Cost
SWAT Tactical Bullet Proof Ballistic Protection Vests $1,870.12 x 8 vests $13,361.00
egiupment entry 2
1 F_
equipment entry 3
equipment entry 4 1 F_
equipment entry 5
TOTAL $13,361.00
E. Supplies - List items by type (office supplies, postage, training materials, copying paper, and
expendable equipment items costing less that $5,000, such as books, hand held tape recorders) and
show the basis for computation. (Note: Organization's own capitalization policy may be used for
items costing less than $5,000). Generally, supplies include any materials that are expendable or
consumed during the course of the project.
Supply Items Computation Cost
ISupply item 1, one line per entry
Isupply item 2
supply item 3
supply item 4
I supply items F~
Isupply item 6 F
I supply item 7
supply item 8
supply item 9
TOTAL $0.00
F. Construction- Asa rule, construction costs are not allowable. In some cases, minor repairs or
renovations may be allowable. Check with the program office before budgeting funds in this
category.
Purpose Description of Work Cost
four lines per entry, use boxes below or an additional
page for more space if required
TOTAL $0.00
G. Consultants/Contracts - Indicate whether applicant's formal, written Procurement Policy or
the Federal Acquisition Regulations are followed.
Consultant Fees: For each consultant enter the name, if known, service to be provided, hourly or daily
fee (8-hour day), and estimated time on the project. Consultant fees in excess of $450 per day require
additional justification and prior approval from OJR
Name of Consultant Service Provided Computation Cost
Supply item 1, one line per entry maximum of three lines
-71 L
ISupply item 1, one line per entry
Supply item 1, one line per entry
W...~m....~
ISupply item 1, one line per entry
Subtotal $0.00
Consultant Expenses: List all expenses to be paid from the grant-to the individual consultants in
addition to their fees (i.e., travel, meals, lodging, etc.)
Item Location Computation Cost
Consultant expense entry 1, one line p
maximum of three lines
maximum of three lines
Consultant expense entry I one line p
maximum of three lines
Subtotal $0'00
Contracts: Provide a description of the product or service to be procured by contract and an estimate
of the cost. Applicants are encouraged to promote free and open competition in awarding contracts.
A separate justification must be provided for sole source contracts in excess of $100,000.
Item Cast
maximum of four lines, additional information should be attached on a separate sheet(s)
maximum of four lines
Subtotal $0.00
'T'OTAL $0.00
H. Other Costs - List items (e.g., rent, reproduction, telephone, janitorial or security services,
and investigative or confidential funds) by major type and the basis of the computation. For example,
provide the square footage and the cost per square foot for rent, or provide a monthly rental cost and
how many months to rent.
Description Computation Cost
four lines per entry, use boxes below or an additional
page for more space if required
TOTAL $0.00
1. Indirect Costs - Indirect costs are allowed only if the applicant has a Federally approved indirect
cost rate. A copy of the rate approval, (a fully executed, negotiated agreement), must be attached. If
the applicant does not have an approved rate, one can be requested by contacting the applicant's
cognizant Federal agency, which will review all documentation and approve a rate for the applicant
organization, or if the applicant's accounting system permits, costs may be allocated in the direct costs
categories.
Description Computation Cost
lone line per entry 17 i I
one line per entry
1 F77-
TOTAL $0.00
Budget Summary- When you have completed the budget worksheet, transfer the totals for each
category to the spaces below.
Compute the total direct costs and the total project costs. Indicate the
amount of Federal requested and the amount of non-Federal hinds that will support the project.
Budget Category
Amount
A. Personnel
$0.00
B. Fringe Benefits
$0.00
C. Travel
$0.00
$13,361.00
D. Equipment
E. Supplies
$0.00
$0.00
F. Construction
$0.00
C. Consultants/Contracts
$0.00
H. Other
$13,361.00
Total Direct Costs
$0.00
1. Indirect Costs
$13,361.00
TOTAL PROJECT COSTS
Federal Request
Non-Federal Amount
. i AFi nn
City of Ukiah, Ukiah Police Department
Review Narrative (Attachment 3)
Program Activity Funded: Tactical Ballistic Vest Purchase
The JAG Formula Program Grant application was provided to the Ukiah City Council on
May 6, 2010 to start the 30 day review process.
This item is scheduled for City Council Comment and Public Comment at the June 2nd
2010, City Council meeting. This item will appear on the June 2nd, 2010 agenda, and
public notification will occur via website agenda posting.
C4 of Ukiah, Ukiah Police Department
Abstract Narrative (Attachment 4)
Program Title: Tactical Ballistic Vest Purchase
The JAG Formula Program funding will allow the department to purchase and
equip eight SWAT team officers with tactical ballistic protection vests.
Tactical ballistic protection vests are vital equipment for SWAT team members,
providing additional firearms protection in hostel SWAT environments. The vests
currently used by the SWAT team were purchased over 15 years ago, and are past their
serviceable life.
Cary aJ kjah
ITEM NO.: 11b
MEETING DATE:
AGENDA SUMMARY REPORT
June 2, 2010
SUBJECT: APPROVE PLANS AND SPECIFICATIONS NO. 10-07 FOR ELECTRICAL
INSTALLATION OF MUSCO SPORTS CLUSTER GREEN SYSTEM AND SITE
UTILITY INFRASTRUCTURE AT ANTON STADIUM.
Background: Previously, Council approved the release of bids for the retrofitting of energy efficient fixtures
and the use of funds from the public benefits rebate and demonstration programs. In an effort to meet the
City's AB 2021 adopted energy efficiency program targets, Anton Stadium field lighting was identified for the
energy efficient retrofitting project. Anton Stadium field lighting was estimated to be $100,000 for new
fixtures with an estimated $150,000 for design and installation.
The AB 2021 Energy Efficiency Program Targets adopted by the City are 264 MWH and 31 kW annually
resulting in ten year targets of 2,636 MWH and 307 kW. It is anticipated that the Anton lighting fixture
upgrade will result in a total energy savings of approximately 22,480 kWh/year (9% of the annual target).
Musco's Light-Structure Green technology will reduce the total fixtures to 49 instead of the current 98 due to
their innovative reflector technology system. This reflector technology reduces spill glare on the night sky
and neighboring properties.
Council approved and awarded bid of new fixtures to Musco Sports Lighting, LLC in the amount of
$97,997.00.
Discussion: Since the award of bid to Musco Sports Lighting, LLC, plans and specifications have been
developed for the design and installation of Musco system in conjunction with the Anton Stadium Rebuild
Project. Since the installation will consist of trenching around the Stadium, this provides a great opportunity
to incorporate additional enhancements to Anton utilizing the same trench. This trench will be used for
laying the conduit for future enhancements such as relocating the scoreboard to center field, addition of
video cameras for local broadcasting, potential retrofit of lighting and electrical for Giorno and Lions field.
The existing Lions football building will be enlarged by 336 sq ft, giving the football and other programs
much needed storage space and providing for a secure location for the electrical supply cabinets.
Recommended Action(s): APPROVE PLANS AND SPECIFICATIONS NO. 10-07 FOR ELECTRICAL
INSTALLATION OF MUSCO SPORTS CLUSTER GREEN SYSTEM AND SITE UTILITY INFRASTRUCTURE
AT ANTON STADIUM.
Alternative Council Option(s): Approval Plans and Specifications with modifications; or 2) Reject
Plans and Specifications and provide Staff with other direction.
Citizens advised: Anton Stadium Stakeholders, Ukiah Lions Football, Babe Ruth Baseball, Ukiah High
School
Requested by: n/a
Prepared by: Guy Mills, Project and Grant Administrator and Mary Horger, Purchasing Supervisor
Coordinated with: Mel Grandi, Electric Utility Director and Sage Sangiacomo, Assistant City Manager
Attachments: 1) Draft Plans and Specifications
Approved: Q~,,
Ja Chambers, City Manager
The plans call for the trenching and installation of a new 8" water line service needed to supply the fire
suppression system for the grandstands. Trenching to underground the City's primary electrical lines will
allow for the removal of overhead electrical lines and existing power poles.
Language has also been added to the bid package highlighting that this is a community project and that if
material suppliers desire to donate and wish to be acknowledged by the City for this act, the bidder should
include this information in the bid as a separate document headed "Donated Materials", and that the unit
and extended prices set forth in the bid form should reflect the reduced cost resulting from the donated
materials. This will allow the City to recognize and acknowledge these donations.
The scope of work and technical specifications for this project was developed by SHN Consulting Engineers
& Geologists, Inc. and will be attached to the Request for Bid. Due to the size of the document, the draft
plans and specifications No. 10-07 for electrical installation of Musco Sports Cluster Green System and Site
Utility Infrastructure at Anton Stadium are available for City Council and public review at City's website
(www.citvofukiah.com) and at the Ukiah Civic Center, 300 Seminary Avenue, Ukiah, California.
Fiscal Impact:
H Budgeted FY 09/10 1-1 New Appropriation Fx_1 Not Applicable
Budget Amendment Required
F
Source of Funds (title and Account Number Amount of Available Funds
Electric Utility-Public Benefit 806.3765.250.005 $150,000
Anton Stadium Grant 140.6050.800.008 $765,000
llc
June 2, 2010
SUBJECT: CONSIDERATION OF A REVOLVING LOAN PROGRAM TO PROVIDE GAP
FINANCING TO SMALL BUSINESSES UTILIZING COMMUNITY DEVELOPMENT
BLOCK GRANT (CDBG) PROGRAM INCOME
SUMMARY: The City of Ukiah's Community Development Block Grant CDBG Program Income Revolving
Business Loan Program has been inactive for quite some time due to lack of funding and the need to have
an administrator to oversee the program. In response to the need within the business community for
business loans, staff would like to reinstate a revised program that will utilize our existing partnership with
the Community Development Commission of Mendocino County (CDC) for administration and leverage new
cooperation with private lenders.
Over the past month, City staff has been in discussions with CDC about reinstating the small business
revolving loan program utilizing approximately $150,000 of existing CDBG Economic Development Program
Income (ED PI) in the City's revolving loan fund. In cooperation with City staff and in consultation with
private lenders, CDC has prepared a summary of a revised loan program called Revitalizing Business
Investment and Lending Development Program (ReBILD). A detailed program summary is included as
Attachment #1 for consideration. During the development of the revised program, CDC and City staff have
consulted with private lenders and local business owners whom have expressed the need for this type of
program and have provided valuable input.
Staff requests that the Council consider the merits of the program and if appropriate direct Staff to begin
implementation.
Fiscal Impact:
Budget Amendment Required
1-1 Budgeted FY Og/10 F-1 New Appropriation ® Not Applicable
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Recommended Action(s): Consideration of the ReBILD program and direct staff to begin
implementation.
Alternative Council Option(s): Provide staff with alternative direction.
Citizens advised: Local Lenders and Various Small Businesses
Requested by: N/A
Prepared by: Sage Sangiacomo, Assistant City Manager and Craig Schlatter, Community
Development Manger with the Community Development Commission
Coordinated with: Jane Chambers, City Manager
Attachments: 1. ReBILD Program Summary
Approved: -
Jan ambers, City Manager
Attachment ##1
COMMUNITY DEVELOPMENT COMMISSION O NOCI COUNTY
ECONOMIC DEVELOPMENT PLAN PROPOSAL
REVITALIZING BUSINESS INVESTMENT D LENDING DEVELOPMENT IN UTA
PROGRAM (Re ILD)
Prepared for City of Ukiah, May 2010
Summary
The recent nationwide economic problems have hit Ukiah particularly hard, and Ukiah
could benefit from a business retention and expansion program. CDC proposes a new
program to spur business lending and investment in Ukiah. The program- Revitalizing
Business Investment and Lending Development in Ukiah program (ReBILD)- is intended
to provide gap financing for local small businesses, encouraging investment and lending
by local financial institutions and creating and retaining jobs.
Ie Program Highlights
® Creates an economic development and retention program for City of Ukiah to be
proactive in assisting local businesses
®m® Retains jobs and promotes job creation in the Ukiah economy
Fills the gap in what businesses need financially and what lender can provide
Provides a way for local lenders to assist local small businesses with loans,
stimulating the local economy and creating and retaining local jobs
No long-term costs of implementing program for City. The loan repayments will
fund future ReBILD loans.
CDC monitors loans and provides all loan servicing through its existing loan
portfolio management system
4- Can be set up and implemented by CDC quickly
Relatively simple concept that can be replicated countywide
II. Loan Terms and Description of Gap Financing
Loan terms will be up to 25 years, depending on the asset being financed and the
demonstrated need for the loan funds. All loans will be Below Market Interest Rate
(BMIR) loans with interest rates between zero and four percent, based on the
business's ability to pay.
Gap Financing is the difference between what the business qualifies for through a
traditional lender and the amount of loan assistance needed.
An example is below:
A local business needs $100,000 to purchase inventory and equipment for expansion
purposes. Based on its current revenue and assets (which have decreased and
depreciated, respectively, during the economic recession), the business only qualifies
for a $75,000 loan through a local lender. So:
Business needs: $100,000
Qualifies for: $75,000
Gap: $(25,000)
The lender contacts CDC and the business completes an application for a ReBILD loan.
ReBILD provides the $25,000 and the business can complete the business expansion.
Funding Re IL
The program will initially be funded by the City of Ukiah's Economic Development
Program Income (ED PI) Revolving Loan Fund (fund balance was approximately
$150,000 as of the date of this proposal). As the program grows and there is more
demand for ReBILD loans, the Program can be supplemented by CDBG Economic
Development grants in open Notices of Funding Availability (NOFA) rounds.
All loan repayments, both from the initial Program Income investment and future open
grants, will revolve and be substantially re-loaned for other CDBG eligible projects.
Therefore, the initial recapture that capitalizes the program will be used again to create
additional jobs, assist more businesses and projects, and provide significant benefits
beyond the Program's initial loans.
CDC will administer ReBILD through its existing MOU with the City. General
administration and activity delivery draw downs are earned and allocated as loans are
closed, so CDC staff time will be reimbursed from these completed transactions. The
City will incur minimal costs (processing checks) in oversight of this program.
IV. Eligible Activities
The Program will assist businesses and projects that start-up, expand, and/or locate
within the city limits of Ukiah. ReBILD funds can be used to finance:
A. Working Capital/Lines of Credit,
B. Refinance debt,
C. Inventory Purchase,
D. Equipment Acquisition,
E. Real Property Acquisition, Construction, Rehabilitation, and
F. Furniture/Fixtures.
CDC will adhere to regulations published by the State Community Development Block
Grant (CDBG) program in its utilization of City CDBG ED PI to implement ReBILD.
State CDBG regulations and the Grant Management Manual for implementation of
CDBG eligible activities can be found on CDBG's website:
http://www.hcd.ca.gov/fa/cdbq/Enterprise.html.
The primary CDBG regulation for utilization of CDBG ED PI for a business loan program
is job creation or retention. The Grant Management Manual states:
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One full time equivalent job (1,750 hours annually) per $35,000 loaned shall be created
or retained for each loan. Two permanent part-time jobs (at least 875 annually) can be
aggregated to count as one full time equivalent job. For loans meeting the national
objective of principally benefiting the Targeted Income Group (TIG) [at least 51 % of the
jobs created/retained shall be held by TIG persons [this income requirement does not
apply for City of Ukiah redevelopment areas].
V. Implementation
1. CDC utilizes existing relationships with local lenders, title companies, and realtors to
market ReBILD citywide
2. Interested small businesses approach participating lenders for financing assistance;
local lender qualifies small business for loan based on business's ability to pay
3. If gap in financing needed, local lender and/or business contacts CDC to participate
in ReBILD; business completes ReBILD application with local lender and lender
sends loan file/application to CDC for underwriting review and approval
4. CDC presents loan to CDC loan committee; receives approval
5. CDC provides ReBILD BMIR loan to small business for gap; BMIR nature of loan
allows business to afford repayment(s) to City
6. Business able to expand, creating new jobs, or stay open, retaining jobs
7. CDC continues to provide loan servicing and monitoring for life of ReBILD loan
8. As loan payments come in, repayments re-used to make additional ReBILD loans
CDC can be ready to begin marketing and implementation of the program within
four to six weeks.
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