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18628 | Approved Minutes January 24, 2017 2017, is the same as the NOI in 2015, then the Landlord is receiving a fair return on investment and no rent increase is necessary in order to receive a fair return on investment. Q: Please explain the discussion of Debt Service? A: Debt Service is referred to in 'Costs of Operation' and is excluded from a Landlord's Costs of Operation. Costs of Operation is part of the Net Operating Income formula, i.e., gross revenues less the Cost of Operation. Q: Please provide more clarify that Notices and Materials to be Provided to Current and Prospective Tenants, (section 6-58.20) is a one-time requirement for existing tenants. A: There is nothing in Section 6-58.20 to indicate or suggest that providing these materials to a current tenant must occur other than with the Landlord's first receipt of rent following March 31, 2016. Since presumably Landlords have now received rent from the tenants who were in the units at the end of March 2016, I am proposing to revise subsection B of Section 6-58-20 so that subsection A is applicable only for prospective tenants." Committee members discussed the Ordinance following Member Friedman's suggested outline: 1. Should mediation remain part of the Rent Review Advisory Committee meeting? Member Friedman stated that he does not consider the RRAC process to be mediation. Particularly, the Committee members are not professional mediators and the meetings are not private. He raised concern that the process may place pressure on a tenant to sign an unfavorable agreement. Friedman suggested that an advocate be present at meetings to inform tenants there is no obligation to sign agreements. He suggested that an option for mediation be offered prior to the Committee meeting. Chair Sullivan-SariƱana acknowledged that the Committee's dual role as mediator and decision-maker is challenging. He noted that the Program Administrator is already offering private mediation and this service is helpful. He also expressed the difficulty that often parties attend the Committee meetings prepared to argue before a third-party decision maker and this dynamic can make compromise difficult. Sullivan-SariƱana also addressed that there is an uneven balance of power in a tenant and landlord relationship. He suggested that requiring mediation prior to the Committee meeting may provide the tenant more support in the situation. Member Griffiths stated he believes the Committee's mediation role is useful. He expressed concern that a mandatory mediation may place an unwarranted burden on one of the parties. He recommended that private mediation prior to the Committee meeting remain optional. Member Schrader stated that the Ordinance does not explicitly include the term "mediation.' Schrader considers mediation during the RRAC meeting useful because the parties are often motivated to reach an agreement. He suggested that optional, professional mediation be offered prior to the Committee meeting. Additionally, the Committee should reduce the time Page 2 of 7 |