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HomeMy WebLinkAbout05-09-16 Health and Public SafetyOFFICE OF THE CITY CLERK KAREEMAH FOWLER, CITY CLERK HEALTH & PUBLIC SAFETY MAY 9, 2016 3:50 P.M. Committee Members Present: John Voorde, Karen White, Oliver Davis, Jo M. Broden, Dr. Fred Ferlic Other Council Present: Tim Scott, Dr. David Varner, Gavin Ferlic, Regina Williams- Preston, Randy Kelly Others Present: Kathleen Cekanski - Farrand, Adriana Rodriguez, Kareemah Fowler, Jennifer Coffinan, Tasha Reed Outlaw, Randy Wilkerson, Steve Cox, Keenan Lane Agenda: Bill No. 16 -48 — Authorizing Agent/Negotiator for Upcoming Police Negotiations Bill No. 12 -16 — Landlord Registration Program - SUBSTITUTE BILL Committee Chair John Voorde called the Health and Public Safety Committee meeting to order at 3:50 p.m. Bill No. 16 -48- Authorizing Agent/Negotiator for Upcoming Police Negotiations. President Tim Scott, 711 Forest Avenue, 16 -48 authorizes Kathy Cekanski-Farrand as our Chief Negotiator for the Council portion of the police negotiations to do business with the F.O.P. This is standard practice and we've had some good negotiations in the past. 455 County -City Building • 227 W. Jefferson Boulevard • South Bend, Indiana 46601 Phone 574- 235 -9221 • Fax 574- 235 -9173 • TDD 574- 235 -5567 • www.SouthBendfN.gov JENNIFER M. COFFMAN ALKEYNA M. ALDRIDGE EMILY SEXTON CHIEF DEPUTY/ CHIEF OF STAFF DEPUTY/ DIRECTOR OF POLICY ORDINANCE VIOLATION CLERK Committeemember Jo M. Broden asked what the timetable is in terms of when this begins, as well as the current assessment of affinities of what the administration is looking at or conflicts in terms of what kind of leg work goes into it hours -wise and content -wise. President Scott explained that it depends on where we are at with the budget. We'll talk to John Murphy on the budget side, and see how it goes with police negotiations. So far it has gone fairly well, members of the Common Council usually serve on that, if you'd like to we usually meet in the afternoons for one (1) to three (3) hours. It has taken five (5) to six (6) meetings in the past. It depends on the different parties and what they need to elaborate on. Council Attorney Kathleen Cekanski-Farrand added that state law allows the agent to work with the Common Council and the Administration in executive sessions for strategy purposes so that you have a strategy before you go into negotiations. By appointing an agent, you have the opportunity for all of the background work to be done prior to going to the table so that there is a united effort going to the bargaining table. By state law, everything has to be wrapped up prior to November 1St Committee Chair Voorde asked what communication they've had with the F.O.P. so far. President Scott stated that he received a generic letter addressed to himself stating that they are ready to open up negotiations. We haven't done anything other than that so far. There are two separate entities. The Council is in charge of the budget end of it, so we are responsible for the fiscal end of the contract. Any language or policy and procedures is on the Administration and the Police Chief. The Committee discussed deadlines for meeting, and determined that they'll meet with the Administration ahead of time so that goals and objectives are determined in advance before going to the table. Council Attorney Cekanski- Farrand stated that it is not anticipated that they will be prepared to go to the table before mid -June. Committeemember Oliver Davis inquired about the Teamsters, and President Scott stated that nothing has been received from the Teamsters, which is why they aren't discussing the Teamsters' contract yet. Committee Chair Voorde clarified that under state law, they are only on the forefront for Police and Fire negotiations. The City Administration leads the joint team for the Teamsters' bargaining. Council Attorney Cekanski-Farrand mentioned that the Council does not have the authority to be in the lead position on financial items for those negotiations. The Council approves the salary and the budget. Generally, during Police and Fire negotiations, two (2) to three (3) councilmembers serve on the team. Committeemember Regina Williams- Preston asked if we have a proposal from Kathy yet, or if we are just appointing her without knowing how much she will be charging. Committee Chair Voorde stated that we appoint Kathy, then she'll be paid above and beyond her normal pay. Council Attorney Cekanski- Farrand stated that she normally charges one -half (1 /z) of her private billable rate, on a per hour basis. 2 Committeemember. Karen White stated that we should get the invoices from two (2) years ago as a reference for the new members of the Council. Committeemember Williams- Preston asked whether or not we would receive a statement from Kathy before she charges, or are we just going to get billed afterwards. Council Attorney Cekanski - Farrand stated that she gives a line -item detail as time goes along. President Scott stated that they've had a very friendly conversation with the F.O.P. during the last few contract negotiations. Committeemember Williams- Preston clarified that this would be work outside of what the Council Attorney is already contracted to perform for the Council. Council Attorney Cekanski- Farrand explained that this is not going to be a typical nine (9) to five (5) workday. These are separate duties above and beyond the other contracted work of the Council Attorney. Council Attorney Cekanski - Farrand stated that she would be glad to share the proposal with Committeemember Williams- Preston if she hasn't already received it. Committeemember Broden asked for some of the background of estimated amount of work and time apportioned to the various areas to help the new councilmembers get up to speed. Committee Chair Voorde asked if there was language in the contract that stated an amount the attorney fees could not exceed, and Council Attorney Cekanski - Farrand stated that she believes it is right around $20,000 maximum. That would be the total that cannot be exceeded for both negotiations. Committeemember Oliver Davis asked if they would be charged for negotiations with the Teamsters, since the Council is not the lead agent, and Council Attorney Cekanski - Farrand answered that there would be a charge, but the role is very minor from the Council perspective because of the small amount of time she would have to spend. President Scott stated that he could get the new councilmembers an overview of how the process works, especially if they want to serve on the negotiations. Committee Chair Voorde asked for public comments on Bill No. 16 -48. Seeing none, he asked for a disposition by a committee member. Committeemember Davis motioned to send Bill No. 16 -48 to the full Council favorably, and it was seconded by Committeemember White and passed unanimously with a voice vote. Bill No. 12 -16 — Landlord Registration Program - SUBSTITUTE BILL Tim Scott, 711 Forest Avenue, started by introducing and thanking all of the people involved in putting Bill No. 12 -16 together. This has been talked about since before I was on the Council, and this is a need by the Administration. Committeemember White also stated that former Councilmember Charlotte Pfeifer had held a number of discussions and meetings to talk about ways in which we could identify various properties. This is not a new discussion; it has been in theworks for years. 3 Councilmember Scott was contacted by several Council Members, they met and made major adjustments after listening to the feedback of Councilmembers and concerned citizens, and he think that what they have now is much better than what they had prior to the feedback. Councilmember Scott stated that he looked at what NRC had written in 2010, and in 2012 when he took it up it was a lengthy and cumbersome document. Councilmember Scott stated that he and Councilmember White have always worked on quality of life issues within our neighborhood, and what always comes up is how we can get in contact with landlords. That has been the biggest issue with the Administration like with Code, Fire, Police, Legal and even Human Rights. The purpose of this program is a new system of equitable accountability. Landlord Registration is designed for the City to have a quick, cost effective way to contact landlords regarding anything having to do with the properties from Code violations to Human Rights. The ordinance is narrowly crafted and consistent with the state law enacted in 2014. Between 2012 and 2014 there was a moratorium on any landlord registrations, and some principles and guidelines from the state came out of it. We've looked at best practices around the state and other places around the country, including Indianapolis and Evansville to craft this legislation. The fees are used for administration and the registration program. All fines go to the new curbs and sidewalks program, which is handled by the Common Council. If there are any fines associated with this, which we hope there are none, it goes back into the neighborhoods in the best way: infrastructure. For greater transparency, we will publish a limited website with limited data. For example, Tim Scott owns 711 Forest Avenue in South Bend, Indiana, or Tim Scott from Kokomo, Indiana owns 711 Forest Avenue in South Bend, Indiana. Beyond that, we are not giving away personal information like phone numbers or addresses, we figure the person and the state in which they live is fine enough. That was something that came out of meeting with the realty group. We do understand that there has to be transparency with the data, but the details of that data would go to Police, Fire, and Code. They'll have that access to expedite any issues. The registration cost is five (5) dollars. The registration period will open from September 15th to December 30th, giving everyone time to register this year. We do want landlord (owner as well as property manager) information. The IT Department has agreed to put up an online database where you can register online without being kicked out of the website. You'll have time to register all of your properties in one session. Code would also be available to assist in the registration. Other cities charge five (5) dollars per property, but ours does not. Ours is five (5) dollars per registration, whether you are registering one (1) property or ten - thousand (10,000) properties. We've dropped penalties down to three - hundred (300) dollars for not registering the property, one - hundred (100) dollars for incomplete registration, one - thousand (1,000) dollars for misrepresenting information. The first time you do that, which is fraud, you would be given a warning. The second time, it would go to the prosecuting attorney. It would cost three - hundred (300) dollars for failure to update registration within thirty (30) days, and three - hundred (300) dollars for failure to renew any property on a yearly basis. S Fines will not be issued right away; there will be a warning letter going out if there is a failure to register or renew the registration. Evansville has a fine of one - hundred (100) dollars a day every day that you do not register. Ours is three- hundred (300) dollars for late registration. This shows the landlord that we are serious about having the registration, but it isn't as big of a burden as we've had in the past. One of the other questions everyone has had is the partial identification and the key number for the property. We are not going to delve into the EIN Number, it is just there to identify the property to the owner if there is any question if that is connected. The number of fines and penalties issued and collected is part of the form here, but we will look at the performance measures to see within a year how this is performing so we can readdress it if we have any issues one way or another. From 2015 -2016, the violations that come up in code show that only twenty (20) percent of the code violations are for properties that are owner - occupied. Rental units account for seventy -two (72) percent. Owners within South Bend account for sixty -six (66) percent, and owners outside of South Bend account for thirty -three (33) percent. Owners in St. Joseph County account for seventy -five (75) percent, and outside of St. Joseph County twenty -four (24.9) percent. Owners in Indiana account for eighty -two (82) percent versus owners from outside of Indiana at eighteen (18) percent. We have concerns with individuals inside of our area, as well as issues with tracking down individuals from outside of our area. President Scott continued his presentation, which is available in the Office of the City Clerk. Santiago Garces will be writing the code for the registration forms, and he is going to see if we can emulate the form that Indianapolis currently uses. Lastly, during the State of the City, the Mayor said the upcoming Landlord Registration Bill will further enhance accountability through the City as the point of contact for every property we encounter. This isn't just about finding irresponsible landlords, it's about making sure that we're able to stay in touch with the majority of landlords who do the right thing. Randy Wilkerson, Director of Code Enforcement 13th Floor of this building, once this is approved, we will educate the public through newsletters and social media to make sure as many people know about this as possible. Once we establish the list, we'll ask for your email address so we can send notifications when it is time to renew registrations. The issue we run into in code hearings is where six (6) of fourteen (14) are LLCs. People do not always show up to represent the LLCs. We've talked about how easy it is to find the registration with the state, and this isn't going to solve the problem because this company is still going to be out of business and it still is not going to have representation, but it will change how we look at people. We can go out and know that you are a good property owner if you're registered, and we'll have a relationship with you. Mr. Wilkerson gave an example of a property that is in very bad condition that he receives complaints about three (3) to four (4) times every week. It is owned by an LLC that went out of business six (6) years ago, their office property went up for sale seven (7) years ago, and the registered agent declined to be the registered agent five (5) years ago, so there is no way to trace this back to someone. He received a letter in the mail from the agent listed as the registered agent by the state. The letter stated that the agent is not the agent for the property mentioned, nor have they ever been. So someone used them as the registered agent when they weren't actually the registered agent. They are dealing with fraud all of the time. Not every landlord out there is doing everything right, which is why we need to build relationships to solve problems. We've had three fires lately, where we were able to get in touch with the owners right away. We were able to complete the demolition process within thirty (30) days due to responsible ownership and communication between owners and inspectors. There will be less confusion if along with a mailed notification, I can send you an email saying that you have trash in your yard that needs to be taken care of. We can send you a picture, and we can solve the problem. I know you by name, but I do not know your LLCs. Steve Cox, South Bend Fire Chief, with offices at 1222 S. Michigan Street. In order for our Fire Investigators to close out their investigations, they need to have contact with the specific landlord. About a third of the time with unoccupied structures, we spend two (2) to three (3) hours roughly just chasing down landlords; man-hours we can spend doing other things. We are being held accountable for what we spend our time doing, and we want to make sure we are making the best use of our time as well as opposed to trying to chase down people that may or may not exist. We're looking at this as a tool for our investigators to be able to use to have contact landlords when we have to conduct an investigation. Tasha Reed Outlaw, offices on the 12th Floor, as a landlord myself, I have a property in Indianapolis, and I was contacted by potential tenants who were very interested to see that my property was listed on the landlord registry. From that perspective, I think that it could potentially make your property a little bit more presentable and let potential tenants know that you are a responsible landlord and you will be held accountable. Officer Keenan Lane, offices at 711 W. Sample Street. I am the Nuisance Abatement Officer, so my full time job is to deal with these problem properties day in and day out. I wish we had a better way of making contact with the owners of the nuisance properties. When I have a property with fights, drug dealing or loud parties, I go through records trying to determine who the owner is so I can make contact with them. Some of these owners have disconnected phone lines or their LLCs aren't registered with the state. It would be a great tool to have if I had a way to immediately contact the owner. Right now I have cases of fraud where there are out of state owners who use local people as managers, and the managers tell the owners that they can't find anyone to rent the property to right now so they aren't collecting rent, when in reality, the manager is collecting cash on a lease that he made. This is why we need the managers' information as well as the owners'. G There are also issues where the owners have been deceased for years, and there are no records of who has been paying taxes. These people do not answer their doors to tell me who owns the house. Tasha Reed Outlaw mentioned that there are plenty of properties where people come in for Code hearings and talk about their landlords, and Code asks who their landlords are, and they are not the people that are supposed to be the owners. They have utilities on illegally, and we have no way to help these people who are being preyed upon. Council President Scott stated that Fred Harris from the Human Rights Commission was unable to attend tonight, but he has similar stories of tenants that come to him with issues, and all they want to do is get them resolved, and it takes him days, sometimes weeks to figure out who the landlords are to take care of Human Rights issues with these properties. I can talk to Penny Hughes every day of the week if we choose to, but there are people out there that don't want us to talk to them, and we need to have those relationships. This just levels the playing field. Council Attorney Cekanski - Farrand reminded the Council Members that if anyone is currently a landlord, they should make that declaration so we do not get into a conflict of interest situation. She does not see it as a reason for them not to participate in the discussion or the vote, but it would be appropriate under the Council Rules to state for the record if you are a landlord currently. Committee Chair Voorde opened it up to Committee Members for discussion. Fred Ferlic, 1128 Georgiana, South Bend, hopes to remind all of the citizens how important Bill No. 12 -16 is. There are three (3) things that make a great city: schools, crime, and quality of life issues. My experience in Code Enforcement over the past four (4) years causes me to fully endorse this. Rental properties get a bad reputation, because some people take advantage of them. I'm not talking about the people who are present, people I consider my friends and responsible people. The problem is that the law has to apply to everyone. We have speed limits even though a lot of us don't speed. We have immunization laws that apply to everybody even though some don't want to be immunized. My frustration originally was with the lack of information when I went to the County offices. You don't have to record deeds in this state. The problem is mainly with out of town owners. You can pay your tax bill through the Treasurer's Office using a P.O. Box, but it may be your uncle that's paying for it while you've already transferred the property to your son. Mr. Ferlic described three (3) different property owners he tried to get in touch with recently. He finally reached them, but they were examples of owners who either forgot that they owned the properties, had no idea they owned them, or just weren't in town keeping the properties up. I fully endorse Bill No. 12 -16, and I have no doubt that it will make South Bend a much better city to live in. Committeemember Broden made a disclosure that she owns a single property in South Bend that she rents. She would like to tweak the landlord registry title to a more contemporary term: Residential Rental Registry. I really appreciate the data and the accounts that were provided 7 from the different departments. That helps us wrap our minds around the problem. Being able to quantify the problem is significant, especially looking at what we are doing with our staff's time. It will also help us measure the performance as time goes on. I don't believe that the ordinance has an assessment and revisitation at a time that is definite, and I would like to see that added. The performance measures mentioned in the ordinance are good, but I think there might be better ones. There also isn't anything listed as a definite time such as six (6) months or one (1) year into this where we do a review of the program. It should be independent or collaborative, so it isn't just Code Enforcement assessing itself. All of this will help us in the future. We've taken best practices from other cities, but they only enacted their bills in the last few years. Are there plusses and minuses in these implementation processes that have informed our legislation? Are there things that are working or not working from them that we should do or should not do? Business -wise, does the registration period make sense? Do we want to tie it to the end of the calendar year completely, and look at it as a quarterly objective with a start date of September 1St? With regard to the fines, my understanding is that we have very responsible property owners. I wonder if we can give an early notification for people who haven't registered thirty (3 0) days out, and then have a very nominal fee, such as ten (10) dollars per day that they haven't registered capped at three- hundred (300) or four - hundred (400), to be more responsive toward the concerns that people might make slight errors. Committeemember Broden is also eager to hear from the business owners regarding their feelings toward this bill and the ways they've addressed their concerns. Committeemember Davis stated that he had already shared with them that he would like to see issues of this nature be brought up in more of a commission concept like at the state and the federal level. Some can go for months, and some may just need one meeting. It can be flexible. Committeemember Davis echoed Committee Member Broden's desire to see more of what other cities have done in regards to their landlord registration programs. I'd like to know these things ahead of time rather than waiting to evaluate at a later time. That's where a commission would help. I would like to address the issue of the Council creating a concept of fraud, because we cannot do that as a Council. Since we are a legal body, I would like those things to be clarified so that any person can say that this is why we used that term. One person opened up by stating that this would not solve the problem, but if you open up by stating that this is not going to solve the problem, then why are we here? Why are we going to create this if it isn't going to solve the problem? I would like to hear more about the discriminatory nature of things we heard about these fines in other places. We need to look at how people are using fines all over the country right now, especially in regard to Ferguson, Missouri. Another issue I'd like to discuss further is the issue of Public Domain. Dr. Ferlic, you found everyone you were looking for and called them all, so you were able to solve these problems using our current system. If you weren't able to solve those problems using our current system, I would see the need for this new program. I like the concept of the independent body. We need to look at what the independent review will look for, so that everyone knows ahead of time what will be reviewed. If you've ever missed your date on a license renewal, there are proportionate fees. It is usually two (2) or three (3) times the original fee. If the regular fee is five (5) dollars, and if you miss it you have to pay three- hundred (300) dollars, that's a concern for me. Councilmember Randy Kelly stated for the record that he and his wife are landlords, and they have an LLC. Bob Masters from the public stood up and asked if the public would have time for input, and Committee Chair Voorde received permission from Dr. Varner, Committee Chair of the Utilities Committee to cut into the next meeting. The Council clarified that the others who spoke were speaking as part of the official presentation, and then the committee members will get a chance to speak before they open it up to the rest of the council members then to the public. Committee Chair Voorde decided to allow the public to speak, then allow the rest of the Council to discuss. Bob Masters, Attorney with Nemeth, Feeny, Masters and Campiti, offices at 350 Columbia Street, speaking to you on behalf of the Real Estate Investors Association of North Central Indiana. The first concerns the fact that many real estate properties are owned by LLC's. This is usually done out of a liability issue or a tax concern. Personally, I've probably created between thirty (30) to fifty (50) LLCs for clients who own real estate. The way it's been discussed, there is an implication that it is somehow illegitimate, owning real estate through an LLC. It's not. Every LLC in Indiana is required to have a registered agent listed with the Secretary of State who is either an Indiana corporation or an Indiana natural person. The office of that registered agent has to be the same address as the principal place of the company's business, meaning that if you own 700 Forest Avenue, LLC, and your principal place of business is 700 Forest Avenue, that's where your registered agent has to be. Corporations that are out of state are required to obtain a certificate from the Secretary of State and register as a foreign corporation in order to do business in the state. They also have to provide an in -state registered agent. That registered agent has to provide an address, and it cannot be a P.O. Box, state law makes that clear. It must be a physical address in the state of Indiana. There was a relatively recent change to Indiana law, which requires that when you create an LLC or a corporation, you have to include a statement that the registered agent agrees to accept service. Indiana law states that if you cannot find a person or a business in the state of Indiana, the Secretary of State is considered their agent, and you can serve the Secretary of State. The Unsafe Building Law doesn't even require you to do that. The Unsafe Building Law says you only have to make a reasonable effort to find these people, and if you can't, you can publish notice in a newspaper. I wish I could have talked to you about this property that's been giving your neighbors problems, because I could have told you how to go after them and set them up in a legally unimpeachable way to vacate and seal the building or take it down if it's a problem. 0 Officer Lane, I appreciate your concerns about criminal properties, but it is somewhat misguided to think that this registry will solve that problem, because the municipal code requires you to send notice about criminal activities to the address that is in the Assessor's records, so you could create this registry and say tell us where to find you, but legally you're required to send these notices to what's in the Assessor's record. I think the tools already exist to solve the problems that were mentioned by the proponents of the bill. Committee Chair Voorde assured everyone that they would be heard before any vote is taken. Committeemember White explained that bills at this level can be sent with no recommendation. Committeemember Davis showed concern that people will only have five (5) minutes to talk about this. I wish we could have a continuance where we can finish this part tonight, and then have another meeting so we can have more discussion. Dr. Ferlic says that the committee serves citizens, not landlords, and it has a duty to protect them. He has people asking him all of the time when something will be done. Committeemember Broden stated that it is a timing issue. This is a tool that we need, but we need to make sure we have the right tool with the right leverage with the right pieces in place. So I would prefer to air this out a little more and I would put a motion that we continue discussion on this tonight and if need be at the next meeting. Committee Chair Voorde asked Council Attorney Cekanski- Farrand to clarify that we do not make a continuance effort at the committee level. If after tonight's hearing, someone feels as though it needs further discussion, then all they have to do is make a motion for a continuance, then it can be continued. Council Attorney Cekanski- Farrand said that they cannot make a continuance effort at the committee level without the sponsors agreeing to it. Councilmember Scott expressed his respect for everyone's opinions, and reiterated that this process began in September with the first version of the bill that was given to Penny Hughes and the realty group. We then met with them for input each month afterwards. The Council Members have had versions of it since February, which we've delayed. Now we have a well - written, simple bill. I like what we have, and I believe that there are a few tweaks we should make. The idea that there needs to be a complete independent study on a five (5) dollar registration to give your name and address and phone number, I don't know what else there is to study. We've come back to tweak the successful chronic nuisance program, and we'll do the same here. Committeemember White asked the sponsor to make sure that we are in the position to answer the questions that have been posed by the evening meeting. We need to outline the parameters and what the key performances are going to be in regard to the independent review, and we'll need to have that ready to address. I think that it was also recommended that we look at the fees and how the five (5) dollar registration fee jumps to three - hundred (300). I'm hopeful that a lot of these issues can be addressed, the issue that remains is making sure that individuals have ample time tonight to be heard. 10 Councilmember Williams- Preston explained that this will solve a problem, but it will not solve the problem being expressed by Code Enforcement, Fire and Police. I think we have to do more work so we can address those bad properties and landlords that we cannot reach. The problems of the people who are intentionally ducking and committing fraud, those are the people who are causing the major quality of life issues that are in our community, and those problems will not be solved with this bill. That's why I don't see the urgency with this bill. I don't think we can just move forward with something that is imperfect, especially when we are talking about imperfections that violate peoples' civil rights. We need to look at that when we talk about disparate impact. The U.S. Department of Justice has been cautioning against these types of fee structures. I will not vote for this if the performance measures stay in place that say we will use as a performance measure the number of fines and penalties issued and collected. We've learned in Ferguson that this has the potential to incentivize. I'd like to hear what the Human Rights Commission has to say about this, because they are the experts and I know they've had some concerns with how this is written. I think we might be stepping into a serious legal battle, and we need to be more responsible than to just say we'll see how it goes. I do own a property that is rented, and it is rented to practically a family member. We have a lot of older senior citizens who acquire properties and let family members live in them. They may charge them a little bit, but we need to clarify who this applies to. They might not perceive themselves as landlords, so do we need to inform them they need to register? Does game day housing fall under this? Committeemember White made a motion to send Bill No. 12 -16 to full Council with no recommendation, Committeemember Davis seconded, and it passed unanimously. With no other business, Committee Chair Voorde adjourned the meeting at 5:17 p.m. Respectfully Submi ed, John Voorde, Committee Chair 11