SR-11-B (13)
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CouncIl MeetIng: June 26, 1984
\ \D ~.JDV \
Santa MonIca, CalIfornIa
1/-8
Jill 2 6 ..
TO:
Mayor and CIty CouncIl
FROM:
CIty Staff
SUBJECT:
RecommendatIon to approve Three Month CIty
Preparaton PerIod for ImplementatIon of
OwnershIp RIghts Charter Amendment (TORCA)
AuthorIze Related Funds for ExpendIture Through
15, 1984.
Staff
Tenant
and to
October
IntroductIon
ThIS report outlInes a plannIng process to be undertaken by the
CIty Manager's OffIce and Department of CommunIty and EconomIC
Development to Implement recently passed PropOSItIon X - Tenant
OwnershIp RIghts Charter Amendment (TORCA).
The report requests
the CounCIl to approve a three month preparatIon perIod, dIrect
the CIty Manager to Instruct CIty staff to proceed as outlIned
and to authorIze expendIture of necessary funds.
Background
On June 5, 1984, the voters of Santa MonIca approved passage of a
Charter Amendment intended to allow converSIon of rental unIts to
tenant ownershIp.
BaSIcally, TORCA WIll allow converSIon from rental unIts to
condomInIums (or cooperatIves) by owners of such propertIes, If
the unIts are offered for sale to present tenants.
There are a
varIety of protectIons for tenants In regard to converSIon
actIVItIes, I.e. offerIng prIce optIon perIod, rIght of tenancy
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CouncIl MeetIng: June 26, 1984
Santa MonIca, CalifornIa
in the event of sale to others and so on.
There IS a mechanIsm
provIded for purchase SUbSIdy for low/moderate and mIddle Income
famll.1es.
Most sImply put, the terms are:
1. owner must have consent for converSIon from at least two-
thIrds of the tenants.
2. owner must have a s 1 gned i ntent-to-purchase agreement from
5l% of the tenants for applIcatIon to move through CIty
processes.
3. owner must hold offerIng prIce to all tenants for a perIod of
two years.
4. non-purchased unIts remaln subject to rent control.
5. occupIed unl ts purchased by non-tenants must contInue to be
occupied by eXIsting tenants and are subJect to rent control.
6. owner must pay a one-tIme "conversIon tax" for each sold unIt
In an amount equal to one year's rent of the unIt.
7. proceeds from the converSIon tax are to be used to create a
yet-to-be desIgned SUbSIdy program for low/moderate Income
tenants and possIbly for mIddle Income tenants as tIme goes
on. Only admInIstratIve costs of the SUbSIdy program can be
covered from these fees.
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CouncIl Meeting: June 26, 1984
Santa MonIca, CalifornIa
8. applIcatIon fees for the converS.lon process are capped at
$5@0 per applIcatIon and no other plannIng & zonIng tract map
fees or any other fees can be charged, Irrespective of actual
processIng costs.
AnalYSIS
There has been a moratorIum on condomInIum converSIons In Santa
MonIca SInce AprIl, 1981.
Because of thIS moratorIum and the
establIshment of Rent Control In Santa MonIca, It is not really
possIble to estImate Immediately what the market for converSIons
WIll be, and consequently what the applIcatIon proceSSIng work-
load WIll be. TORCA legIslatIon requIres a housIng subSIdy to be
put In place. A host of admInIstrative and policy concerns need
to be addressed In order for Santa MonIca to respond profes-
slonally and effICIently to the legIslatIon.
Therefore, staff recommends that a three month preparatIon period
be InItIated.
DurIng thIS perIod staff will reVIew, evaluate and
des Ign procedures deta Iled below to Implement the leg Isla t Ion.
ApplI ca t Ions, gUIdelInes, relevant forms and procedures WIll be
avaIlable to the publIC no later than October IS, 1984.
Proposed Tasks
1. General PlannIng and Overall Issues IdentIfIcatIon
The experIence of other localItIes WIll be brIefly reVIewed
and evaluated In order to explore and clarify Issues which
are relevant to the Santa MonIca legISlation.
The amendment
Itself WIll be analyzed and questIons and Issues WhICh need
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CouncIl MeetIng: June 26, 1984
Santa MonIca, CalifornIa
clarIfIcatIon WIll be IdentIfIed, dIscussed and resolved.
Volume estImates WIll be drawn for program desIgn purposes,
and legal reqUIrements of the CIty under the legIslatIon WIll
be evaluated In order to deSIgn system procedures WhICh
Incorporate reqUISIte protectIons.
2. AdmInIstratIve DeSIgn of CIty Procedures
CIty admInIstratIve processes
that
exist
such
as
the
subdiVISIon process WIll be revIewed.
ReVISIons requIred by
TORCA WIll be suggested.
A manual or gUIde to the new
processes WIll be drafted and work process flow charts and
tImelines WIll be produced.
A specIfIC TORCA process WIll be deSIgned to complement the
City's subdIVISIon process.
Interdepartmental functIonal
relatIonshIps WIll be IdentIfIed, procedures evaluated and
TORCA responslbIlItles WIll be approprIately aSSIgned WIthIn
the CI ty.
An applIcatIon kIt WIll
be prepared WIth
InstructIons and Intake proceSSIng time tables.
3. Re9ulatory Issues
ReVIew of the pOlIcies and reqUIrements of present agencIes
and processes WhICh may regulate the transactIons WIll be
undertaken.
Some of the agencIes and theIr reqUIrements to
be evaluated are: the CalIfornIa Department of Real Estate,
the
Coastal
CommISSIon,
and
the
Rent
Control
Board.
Procedures of BUIldIng and Safety code complIance and
PlannIng SubdiVIsion Map Act processes WIll be reVIewed.
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CouncIl MeetIng: June 26, 1984
Santa MonIca, CalIfornIa
From the analYSIS of these and other regulatory processes,
TORCA regulatory plans WIll evolve.
4. Data Management Systems
The analYSIS of the legIslative and the adm~nstratIve
procedures, durIng the preparatIon perIod, wIll dIctate
methods and detaIl level of data collectIon and program
monItorIng for TORCA. An evaluatIon wIll be made of eXIstIng
data bases and theIr utIlity for thIS program.
A system of
data collectIon and retrIeval WIll be deSIgned to meet the
needs of the legIslatIon,
staff monItorIng and publIC
InformatIon reqUIrements.
5. Tenant/Landlord InformatIon
The needs of constItuent communItIes for InformatIon WIll be
IdentlfIed.
A publIC InformatIon plan WIll be prepared and
WIll Include TORCA AdmInlstratIve hand-outs, brochures, kItS
and other relevant materials.
As a part of the process, the need for a techn leal support
capaCIty WIll be evaluated and the deSIrabIlIty of aSSIsting
a lImIted number of model proJects WIll be assessed.
6. SUbSIdy Program
An analYSIS of the need for, and form of, the SUbSIdy as
reqUIred by the legislation for low/mOderate and mIddle
income famllles WIll be made. AlternatIve SUbSIdy mechanisms
will be set forth.
POlICY goals for these alternatIves WIll
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CouncIl MeetIng: June 26, 1984
Santa MonIca, CalIfornIa
be identI fled, admI nistrat 1 ve frameworks wIll be presented,
and crIterIa for choosIng among the alternatIves wIll be
offered.
An analysis of the appllcabIlity of dIfferIng
financlng mechanIsms wIll be dIscussed.
Processing and
procedures for SUbSIdy will be conSIdered and an evaluatIon
of the potent 1 al role (s) of non-prof 1 t groups, WI th 1 n the
system, wIll be conSIdered.
7. EstImated Pr09ram Costs
An estImated annual budget wIll be prepared to cover the CIty
staff actIVIties and work products assocIated wIth the plan
outlIned above.
The costs wIll be those needed to support
the admInIstratIon of the TORCA program by the CIty.
A fee
structure to cover these costs wIll be recommended.
Process
Deputy CIty Manager Lynne Barrette wIll manage thIS three month
process, wIth the assIstance of Rusty FlInton, ASsIstant to the
DIrector of C/ED, who WIll prepare the work plan for presentatIon
to the CouncIl In October.
The Manager's offIce wIll convene a
CI ty staff workIng group and WIll assign responsIbIlI tIes to
execute the proposed tasks. OutSIde contract consultants wIll be
asked to work wIth the group as necessary.
To provide addItIonal expertIse and InformatIon to the workIng
group the Manager I s offIce will perIodIcally convene meetIngs
WIth people from the communIty who are concerned wIth these
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CouncIl MeetIng: June 26, 1984
Santa MonIca, CalIfornIa
EXHIBIT B
NOTE: TORCA funds wIll be expended as needed (outlIned below).
ACCOUNT NAME ACCOUNT NUMBER FY84-85
(to 10/15/84)
OvertIme & Temporary
AdmIn. 01-200-261-0@0-149 $ 1,0'00
Plan.& ZonIng 01-200-266-000-149 3,0'00
HOUSIng 01-200-264-000-149 2,0'00
Supplles & Exp.
AdmIn. 0'1-200-261-000-231 400
Plan.& ZonIng 01-200-266-000-231 1,40'0
Legal AdvertIsIng
(CI tl zen Info.)
Plan.& ZonIng 01-200-266-000-254 2,500
HOUSIng 01-200'-264-000-254 2,50'0
PrInted forms
Plan.& ZonIng 01-200-266-000-411 1,800
HOUSIng 01-200-264-000-411 1,800
Bldg.& Safety 0l-200-321-000-411 50'0
ProfessIonal
ServIces-No BId
Plan.& ZonIng 01-200-266-000-506 20,000'
HOUSIng 01-20e-264-000-506 15,000
AdmIn. 01-200-261-000-506 5,@0e
$56,9130
TOTAL - OCTOBER 1, 1984
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CouncIl MeetIng: June 26, 1984
Santa MonIca, CalIfornIa
Issues.
These meetIngs WIll be open to all those who are
Interested.
T~metable
A timetable for thIS preparation per~od, conclud1ng In October,
1S attached In Exh1blt "A".
FIscal/Budget Im?act
The recommended actIon w1ll have no 1mpact on the current budget
year~
In an act10n on June 19, 1984, C1ty CouncIl approved start-up
costs of TORCA In an amount of $56,900 (see ExhIbit B attached).
It IS requested that Councll approve the formation of a TORCA
fund to WhlCh the approved amount from the General Fund wIll be
loaned.
Recommended ActIon
Staff respectfully requests that Council:
1. Approve concept of a three month preparat10n perIod wlth a
report due to CouncIl by October 1, as outlIned above.
2~ D1rect staff to evaluate processlng costs of the program and
recommend a fee structure for TORCA Wh1Ch covers, but does
not exceed, those costs.
The evaluation and recommendatlon
are to be a part of the work plan to be presented to CounCIl
In October.
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CouncIl MeetIng: June 26, 1984
Santa MonIca, CalIfornIa
3. Author i ze and approve a loan from the General Fund to the
TORCA fund In an amount not to exceed $56,900.
Prepared by: Rusty Fllnton, AssIstant to the DIrector
Mark TIgan, DIrector
AdmInIstratIon DIVISIon
Department of CommunIty and EconomIc Development
Attachments: ExhIbit A
ExhIbit B
lIIX
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