HomeMy WebLinkAbout11A - ORD PREP
Jwf/lar 8.27.07
ORDINANCE NO. 2007-
AN ORDINANCE OF THE CITY COUNCil OF THE CITY
OF SANTA ANA AMENDING SECTION 21-120r.l(a) OF
THE SANTA ANA MUNICIPAL CODE TO EXTEND THE
FEE CHARGED TO FINANCE THE CITY'S PROACTIVE
RENTAL ENFORCEMENT PROGRAM.
THE CITY COUNCil OF THE CITY OF SANTA ANA HEREBY ORDAINS AS
FOllOWS:
Section 1. The City Council hereby finds, determines and declares as follows:
A. In June of 1990 the Mayor's Task Force on Neighborhood Standards and
Preservation recommended the implementation of a mandatory inspection
program for all residential rental properties in the City of Santa Ana.
B. On July 19, 1992, representatives from the Planning and Building Agency
and various apartment associations met and reached agreement on the
Proposed Proactive Residential Enforcement Program.
C. The purpose of the proposed program was to promote public health,
safety and welfare through a proactive program of periodic and systematic
inspections of all residential rental properties in the City of Santa Ana.
D. The spirit of the proposed program was to promote environments in which
unsanitary conditions and life safety hazards are reduced for occupants of
residential rental properties and inspection would ensure that building
systems providing water, sewage disposal, heating and electricity are safe
and operational and encourage the residential rental industry to affect
repairs and conduct preventative building maintenance before deteriorated
conditions upon rental property reach gross proportions.
E. The adoption of the Proactive Rental Enforcement Program necessitated
increased staffing to focus enforcement efforts exclusively on the identified
proactive rental inspection areas.
11 A-1
Ordinance No. NS-
Page 1 of 6
F. The additional staff positions and operational costs were proposed to be
borne through the adoption of an annual inspection fee assessed to
members of the residential rental industry who voluntarily chose to engage
in the business of residential rentals.
G. All fees assessed under proposed program bear a direct correlation
between the amount of the fee and the actual cost of the services
provided. Therefore, all fees charged under the Proactive Rental
Enforcement Program are used only to pay for the administration,
enforcement, implementation and other services specifically related to
PREP.
H. The $17.50 per unit annual fee was proposed to cover only the cost of the
additional staff and operational costs associated with the Proactive Rental
Enforcement Program and would be used to fund only the cost of the
program and not on-going complaint-driven code enforcement activities.
The Program's focus shifted in 1999 to include complaint-drive code
enforcement activities related to rental housing.
I. In light of the fact that the Planning and Building Agency did not have the
necessary resources for the collection of the proposed inspection fee and
for the ease and convenience to the residential rental business industry,
the $17.50 surcharge fee was proposed to be collected with the business
license tax already paid by persons operating such a business on an
annual basis.
J. The proposed program provided for initial inspections of all residential
rental properties, unless exempted, within designated proactive rental
housing code enforcement areas; as well as, reinspection of each property
after completion of the initial inspection period.
K. On August 3, 1992, in response to the recommendation of the Mayoral
Task Force committee and to address the growing concerns of the
community regarding the deterioration of residential rental units in the City
as it related to issues of life, health and safety, the City Council of the City
of Santa Ana adopted an ordinance creating a $17.50 surcharge fee to
fund the cost of a residential rental inspection program.
L. The ordinance established a sunset date of December 31, 1999 for the
$17.50 fee to allow for a "seven year period to undertake the program and
evaluate its impact", thus "providing a time frame sufficient to fully monitor
[its] results".
M. The ordinance also provided that any extension of the surcharge fee
beyond the sunset date would require further action by the City Council.
Ordinance No. NS-
Page 2 of 6
2
11 A-2
N. On June 20, 1994, the City Council adopted Resolution No. 94-026 which
approved and adopted the "Gold Seal Incentive Program" whereby
particular residential properties or residential apartments may be certified
as having met standards of excellence in property maintenance and as
certified, would be exempted from payment of the surcharge fee for a
three-year period.
O. In October 1999, the City Council adopted Ordinance No. NS-2408 which
extended the PREP fee until December 31,2003 based on a fee study.
P. This 1999 fee study reported that funding the cost of the required staff and
operational costs associated with the continuation of the Proactive Rental
Enforcement Program would amount to an estimated $608,410. The 2003
fee study for PREP reports an increase in required staff and operational
costs from $608,410 to $617,360.
Q. In 1999, business license records indicated an inventory of 28,500 rental
units generating $498,750 in revenue. Business license records for
calendar year 2003 indicated an inventory of 27,231 rental units, 958 less
than in 1999 which, at $17.50 per unit, generated annual revenue of
$476,542.
R. From 1999 to 2003, the decrease of 958 rental units and increase in
staffing and operational costs created a further widening of the deficit
between program costs and revenue generated by the Rental Inspection
Fee.
S. To offset a percentage of the revenue versus costs deficit in the 1999
program budget, and given that inspection emphasis for the extension was
to be placed primarily on the exterior of the rental properties, PREP
staffing was reduced form six to five inspectors.
1. Staffing for the PREP program during the extension period of calendar
years 2004 through 2007 was reduced from five to four.
U. It is anticipated that, for the 2008-20011 extension, the Proactive Rental
Enforcement Program will generate $454,158.73 a year in revenue based
upon the $17.50 fee per unit and the estimated number of units
(approximately 25,951).
V. A fee study conducted for the calendar year 2006-2007, found that the
Proactive Rental Enforcement Program will cost the City of Santa Ana
$641,923.92 a year.
W. It is anticipated that the deficit for the Proactive Rental Enforcement
Program will be $187,765.19 a year for the extension period of 2008-2011 .
11A-3
Ordinance No. NS-
Page 3 of 6
Currently, the PREP program continues to have four inspectors and based
upon the revenue and costs projection, that is not expected to change.
X. Continuation of Proactive Rental Enforcement Program is essential to the
neighborhoods in Santa Ana to provide assurances that the rental housing
will not be allowed to revert to the condition which led to the initial
concerns for the implementation of an inspection program in 1992.
Y. Recurrent poor management by rental owners has become a challenge for
the Proactive Rental Enforcement Program inspectors in maintaining
improvements gained in the previous areas while conducting inspections
in the next neighborhood.
Z. In an effort to continue monitoring the results of the program, PREP will
continue for another four-year period, commencing on January 1, 2008
and will sunset on December 31, 2011, to allow for review of the program
Section 2. In accordance with the California Environmental Quality Act, the
recommended action is categorically exempt from further review per section 15321,
Class 21, as the project involves an enforcement action by a regulatory agency to allow
the continuation of an inspection program. A Categorical Exemption for Environmental
Review No. 2007-123 will be filed for this project.
Section 3. Section 21-120r.1 of the Santa Ana Municipal Code is hereby
amended, which amendment only extends the sunset clause currently in said section
from 2008 to 2011, to read in full as follows:
Sec. 21-120r.1. Residential Rental Surcharge.
(a) Except as otherwise provided in subsection (b) of this section, the
business license tax for residential property rental and residential
apartment rental shall consist of the amount set forth in subsections (2)
and (3) of section 21-120r plus an annual surcharge of seventeen dollars
and fifty cents ($17.50) per each property rental unit or each apartment
rental unit. The surcharge hereby established shall be due and payable
and shall be paid at the same time and in the same manner that the
amount due under section 21-120r is due and payable. No business
license shall be issued unless the surcharge is paid. Penalties and interest
shall be assessed upon the total amount due and unpaid at the rate
specified in this chapter until such time as both the amount due under
section 21-120r and the surcharge due under this section are paid in full.
All provisions for the enforcement, collection and recovery of unpaid
business license taxes shall likewise apply to the enforcement, collection
and recovery of any unpaid surcharge. Notwithstanding any provision of
this chapter to the contrary, the amount of the surcharge shall not change
Ordinance No. NS-
Page 4 of 6
4
11A-4
except by amendment of this section. This section shall expire on, and be
of no further force or effect after December 31, 2011.
(b) The city council may, by resolution, establish a program whereby
particular residential properties or residential apartments, licensed
pursuant to this chapter, may be certified as having met standards of
excellence in property maintenance. In such event, the executive director
of the planning and building agency shall be responsible for the
implementation of that program. Owners of property certified pursuant to
that program shall be exempt from the payment of the surcharge specified
in subsection (a) of this section for the three (3) tax years next succeeding
the time of such certification. The executive director of the planning and
building agency shall provide the executive director of the finance and
management services agency with listings of licensed properties certified
under this program, which shall be periodically updated to reflect changes.
The city council may provide for such financial limitations on the
exemptions to be granted from the surcharge as the city council deems
appropriate.
Section 4. If any section, subsection, sentence, clause, phrase or portion of this
ordinance is for any reason held to be invalid or unconstitutional by the decision of any
court of competent jurisdiction, such decision shall not affect the validity of the
remaining portions of this ordinance. The City Council of the City of Santa Ana hereby
declares that it would have adopted this ordinance and each section, subsection,
sentence, clause, phrase or portion thereof irrespective of the fact that anyone or more
sections, subsections, sentences, clauses, phrases, or portions be declared invalid or
unconstitutional.
Section 5. Neither the adoption of this ordinance nor the repeal hereby of any
ordinance shall in any manner affect the prosecution for violation of ordinances, which
violations were committed prior to the effective date hereof, nor be construed as
affecting any of the provisions of such ordinance relating to the collection of any such
license or penalty or the penal provision applicable to any violation thereof, nor to affect
the validity of any bond or cash deposit in lieu thereof, required to be posted, filed or
deposited pursuant to any ordinance and all rights and obligations there under
appertaining shall continue in full force and effect.
ADOPTED this
day of
,2007.
Miguel A. Pulido
Mayor
11A-5
Ordinance No. NS-
Page 5 of 6
APPROVED AS TO FORM:
Joseph W. Fletcher, City Attorney
By:
Laura A. Rossini
Deputy City Attorney
AYES: Councilmembers
NOES: Councilmembers
ABSTAIN: Councilmembers
NOT PRESENT: Councilmembers
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, PATRICIA E. HEALY, Clerk of the Council, do hereby attest to and certify that the
attached Ordinance No. NS-XXX to be the original ordinance adopted by the City
Council of the City of Santa Ana on , and that said ordinance was
published in accordance with the Charter of the City of Santa Ana.
Date:
Clerk of the Council
City of Santa Ana
Ordinance No. NS-
Page 6 of 6
6
11A-6