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LOFTIN I BEDELL P.C. Honorable Mayor and Councilmembers City of Santa Ana October 13, 2022 Page 4 of 7 Directors, 104 Cal. App. 3d 648 (1980), Hackethal v. California Medical Assn., 138 Cal. App. 3d 435, 443 (1982), and Natarajan v. Dignity Health, 11 Cal. 5" 1095, 1106-07 (2021). Clearly, tenants have a pecuniary interest in the considerations related to reviewing, analyzing and determining applications for capital improvement or NOI rental increases, and on the amount of rent to be charged generally — as do the landlords. The decision to create a mandatory imbalanced board of this administrative process in favor of the tenants violates the landlords' right to due process, based on settled California jurisprudence. A mandatory imbalanced board suggests the City does not consider the rent board as a bona fide "relief valve" to assure that property owners receive a constitutional fair return despite the City's harsh restrictions on rent increases and passthroughs. Fiscal Impact In the discussion, the Mayor Pro Tern asked staff the implication of the fiscal impact section of the staff report, and how it could show no impact, Mr. Brown and other staff responded that it was the intention that there would be no net increase in cost to the general fund through the imposition of the fee, through the specific action contemplated in the staff report. It was noted in the staff report that the City had entered into a $500,000.00 contract with RSG to assist with the implementation plan, which apparently was not considered a "fiscal impact" despite that there is no "fee" to cover these expenses. It is important to note that jurisdictions like Santa Ana typically report fiscal impact of proposed ordinances in the staff reports. There are constitutional constraints on the ability of a City to approve measures that cause the City to incur debt. Otherwise, the constitutional debt limit which "prohibit a city from incurring indebtedness beyond the city's ability to pay the debt back from revenues received in the same fiscal year in which the debt is incurred would be meaningless. Cal. Cost. Art, XVl Sec. 18. California Municipal Law Handbook, 2016 ed., Sec. 5.13. This fiscal impact did not receive adequate discussion from staff, despite acknowledgement that neither the rent board, nor the study, would be funded at the outset from fees. Further, the discussion failed to consider the legal costs given the proposals contrary to staff and the City Attorney's own acknowledgement that the mandated imbalance in the rent review board would invite due process litigation. Accordingly, we urge the City Council to reconsider the concerns identified in this letter, with additional consideration of the costs that will arise at initiation, and in defending the apparent due process violation on the face of the ordinance. Brown Act Violation The Brown Act ensures that Iocal governing bodies deliberate in public. Cal. Gov. Code Sec. 54950. Documents distributed to a majority of the legislative body in connection with any matter subject to discussion at a public meeting item are public records that must be made available to the public "without delay." Cal. Gov. Code Sec. 54957.5(a), California Municipal Law Handbook, 2016 ed., Sec. 2.72. At the October 4, 2022 City Council meeting, the Council discussed and considered apparent "redline" changes to the proposed legislation sent by Tenants United to the City Council. Some of those changes were adopted. Notwithstanding that the Brown Act requires prompt disclosure of revisions without /Volumes/Shared/Kingsley Management Company/700 Litigation/Kingsley V City Of Santa Anaf010 Correspondencel2022.10-13 Correspondence To City Regarding Implementation Of Rent Board V4.Doea