REPORT TO THE CITY COUNCIL November 19, 2015 FROM: JENNIFER CLARK, Director Development and Resource Management Department BY: DEL ESTABROOKE, Parking Services and Community Revitalization Division Manager Development and Resource Management Department SUBJECT ..Title BILL - (For introduction) - Amending Subsection (f) to Section 1-304 of the Fresno Municipal Code relating to Code violations ..Body RECOMMENDATION Staff recommends that the City Council adopt the proposed amendments to Subsection (f) of Section 1-304 of the Fresno Municipal Code authorizing the City use of a Receivership. EXECUTIVE SUMMARY Acting on community concerns and the recommendations of the Mayor-Council Code Enforcement Task Force, the City Council recently approved amendments to the Blighted Vacant Building Ordinance. The Blighted Vacant Building Ordinance will mitigate a substantial portion of vacant and blighted property issues within the City but there will still be some properties that do not comply. Under this amended ordinance's authority, the City will create a Receivership Program to address the remaining properties with ongoing or extensive violations of the Municipal Code, Fire Code, Building Code, or excessive criminal activity where the record owner is either unwilling or unable to correct the issues. BACKGROUND The Fresno General Plan was created to protect investments in private and public property; to preserve neighborhood character and community values; and to promote investment and reinvestment in Fresno's established neighborhoods. The creation of a Receivership Program under this ordinance continues the work of the Mayor-Council Code Enforcement Task Force to improve the quality of life in our neighborhoods. Nationally collapsed economies resulted in property-related blight increasing throughout neighborhoods. Properties became blighted due to lack of maintenance following a foreclosure, property abandonment, or the inability of the property owner to conduct proper maintenance. Left unchecked, blight leads to more blight, an increase in crime, reduced quality of life, and lower property values. The City's Receivership Program is based on the California Health and Safety Code and the recently amended Blighted Vacant Building Ordinance. The Receivership Program will be initiated by City Staff who identify blighted properties in the City. In order to be considered as a potential receivership property, the parcel must be within the City; have extensive and continuing violations of the Municipal Code, Fire Code, Building Code, or ongoing criminal activity; and the record owner must be unwilling or unable to correct the violations of law. After receiving direction and documentation from Staff, the City Attorney's office will file a petition with the court nominating a receiver and seeking authorization to pursue a receivership. If approved, a receiver will take control of the property, abate all code violations and nuisance conditions using funds the receiver secured from lenders or income generated by the property itself. Upon completion of the rehabilitation, the receiver recovers all costs through either a first priority lien on the property or occasionally through a post-abatement sale of the property. The City's role in the Receivership Program is to identify potential receivership properties, petition the Court to approve the receivership, and nominate a potential receiver. The ultimate approval of properties and receivers is made by the Court. Once a property is approved for a receivership, Code Inspectors and the appointed receiver would jointly inventory the property and create a scope of work for court approval. The City Attorney's Office will have an outside law firm manage the program at no cost to the City. The firm will be responsible for all aspects of the program including, but not limited to assembling lenders willing to make loans to the property based on a receiver's certificate, supply local contractors to perform work on the properties and realtors to market and sell the rehabilitated properties. Monthly reporting from the receiver and the firm to the City would be mandated. ENVIRONMENTAL FINDINGS This is not a "project" for the purposes of CEQA pursuant to CEQA Guidelines, section 51378(b)(5), as it is an administrative activity that will not result in direct or indirect physical changes to the environment. LOCAL PREFERENCE Not applicable FISCAL IMPACT There is no direct fiscal impact from the passing of this ordinance. However, there are fines and penalties assigned in the ordinance which will impact revenues depending upon the number and severity of cases identified. Attachment: Subsection (f) to Section 1-304 of the Fresno Municipal Code