Report 2011-131 Recommendation 2 Responses

Report 2011-131: City of Vernon: Although Reform Is Ongoing, Past Poor Decision Making Threatens Its Financial Stability (Release Date: June 2012)

Recommendation #2 To: Vernon, City of

To increase accountability and transparency in its governance, the city should determine whether it will continue to own housing and communicate its decision to the public as soon as appropriate. Should the city decide to retain ownership of the housing, it should continue the effort to develop policies and procedures that are necessary to ensure fairness and impartiality in its management of city-owned housing.

1-Year Agency Response

The Housing Commission has recommended on several occasions that the City Council sell the City-owned housing units in Huntington Park. Each time, the Council has deliberated on the recommendation at a public meeting and communicated its determination and reasons thereto back to the Commission via staff report at a public meeting of the Commission. The Commission has never recommended the sale of any City-owned units in Vernon. In order to ensure fairness and impartiality in the management of City-owned housing, the Housing Commission worked extensively over the last two years to develop and implement a number of policies, procedures, and related forms. Paramount among these are the Vernon Rental Housing Policy, which requires compliance with all applicable federal and state fair housing laws, all rents to be set at a market valuation based on multiple independent appraisal sources, and a new, standard one-year form lease; and Lease-Up Procedures for New Tenants, which includes a standard Expression of Interest Form and Application, advertising requirements, and the public lottery process for randomly rank ordering prospective tenants onto a wait list. Other procedures developed relate to transitional issues for pre-existing tenants and enforcement of key lease provisions. As of July 1, 2013, over 25% of the City's housing stock is leased at the full market rents established by the Housing Commission. As of August 1, 2013, all pre-existing tenants will reach the second level increase of a four-tiered annual market rent implementation schedule designed to effectuate full market rents for all City-owned units by 2015.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

The city continues to maintain its housing and as it describes has taken steps to increase its rents to market value. It has developed policies and procedures and related forms. Finally, in follow-up inquiries, the city explained that it has awarded a contract to a third-party for property management services for June 1, 2013 through May 31, 2014.

6-Month Agency Response

In August 2012 the city council voted to continue its ownership of the housing and reported this decision to the Housing Commission in September 2012. By December 2012, the city established policies and procedures for housing that it believes will ensure fairness and impartiality in its management of city-owned housing. The city is in the process of identifying and pursuing a third party property management firm and in late January 2013, city staff issued a revised Request for Proposals for a property management firm.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

60-Day Agency Response

The city did not address this recommendation in its August 2012 response. (See 2013-406, p. 190)

California State Auditor's Assessment of 60-Day Status: No Action Taken

All Recommendations in 2011-131

Agency responses received after June 2013 are posted verbatim.