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Decision on cost of Summerset code enforcement fines imminent

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The Summerset Village verdict should hit the streets on Monday.

Independent Administrative Hearing Officer Michael Flores on Friday told me he expects to release his decision after the weekend.

His draft was already at 40-plus pages, Flores said as he left Fresno City Hall in the late afternoon. Perhaps calm reflection at home over Saturday and Sunday would lead to some tightening, he added.

Editor’s pencil or no, Flores’ decision figures to be a doorstopper. And don’t be surprised if the scene-stealer is a concept called “notice and order.”

Summerset Village Apartments, as we all know, is a Central Fresno complex of 220 units. Well over 1,000 people live there. Many are poor.

Summerset lost its natural gas service last November. The residents went days without gas-generated heat and hot water. It was days before anyone told City Hall.

The result was a health-and-safety crisis that attracted some national attention. There was much finger pointing when it came to apportioning blame among politicians and bureaucrats.

In the end, Summerset owner Chris Henry was hit with $290,000 in fines for 1,450 code violations. He appealed to Flores. Such hearings are usually held in a small conference room at City Hall. This one was of such interest among residents and reporters that it was moved to the Council Chamber.

Henry’s appeal comes down to two claims.

First, he shouldn’t have to pay because City Hall made a promise: If Henry spent a minimum of $290,000 on “extras” when restoring Summerset’s units to code, then the fines went away.

In essence, Henry says, he and City Hall agreed that the $290,000 would be better spent on upgrading the tenants’ homes above the minimum level than in fattening code enforcement coffers.

City officials acknowledged there was vague chatter along these lines in late 2015 and early 2016. But nothing was put in writing and signed by both sides, they added.

Henry reportedly spent $1.6 million on Summerset’s rehabilitation. It’s far from clear whether $290,000 of that sum was for the “extras” in question. If so, it’s also unclear what that $290,000 bought.

Second, Henry says the city acted too fast when immediately issuing a $200 fine for each of the 1,450 code violations.

It turns out that the Henry and city legal teams agree for the most part.

The city’s thinking in the midst of the initial chaos was that the health and safety of Summerset’s residents was immediately threatened. There was no time to waste. Therefore, the standard time-consuming process for convincing/coercing a landlord to fix things couldn’t apply.

Henry argued that such a conclusion didn’t apply to all 1,450 violations. The two legal teams got together and divided the 1,450 violations into three groups: Violations of no immediate danger; violations of immediate danger; violations still in dispute as to the level of danger.

It’s the last group – violations still in dispute – that Flores will tackle in his decision. There are 126 such violations.

No need here to go into the politics of the Summerset decision. Flores will base his decision on the law. But the former deputy city attorney knows full well that his words will ripple through mayoral and city council policy-making for years to come.

A “notice and order” is code enforcement’s official warning. A notice and order says to the landlord: The city found the following violations; you’ve got time (usually 30 days) to fix things to our satisfaction; if you don’t, we’ll lower the hammer (fines); if necessary, we’ll take you to court.

A notice and order is an incentive.

Many city officials have gone out of their way in recent years to publicly demonize private-sector owners of rental housing. Citywide rent control – inevitably, top-to-bottom government regulation – is the ultimate goal of the housing activists who have taken control of the public debate.

But until that day comes, City Hall needs something less than a stick to get landlords to act swiftly when code violations are recorded. The prospect of avoiding a stiff fine is part of that carrot.

But Henry didn’t get a notice and order. The emergency was deemed too serious. The health and safety of hundreds of people were considered to be at risk.

The city told Henry: Fix things immediately. And here’s an immediate $290,000 fine, to boot.

But city officials didn’t say: Things are so serious at Summerset that we’re shutting down the entire place right now – turning 1,200 or 1,400 or 1,600 people into refugees.

Most of Summerset’s residents stayed in their homes throughout the repairs.

But what if Henry, seeing he wouldn’t get the benefit of a notice and order, had embraced the city’s finding – Summerset was a dangerous place. So, he shuts the complex down, citing City Hall’s own analysis.

City Hall would have had a real news story on its hands.

City officials knew the score in the weeks after the Summerset crisis hit. They had to dispense with the notice and order, thus producing an immediate fine of a size to mollify an inflamed public. And they had to convince Henry to play ball when it came to fixing the problems while tenants remained near their hearths.

Henry knew the score, as well. It was his agent who first pitched the idea of a one-for-one credit – one dollar of reduced fine for every dollar of “extra” rehabilitation.

The short-term effect of Flores’ decision will be headlines about Henry’s fine. There may be talk by Henry or City Hall of taking the decision to Superior Court.

I suggest the long-term effect will be another twist added to the concept of “notice and order,” a bureaucrat’s term for “breathing spell.”

Code enforcement fails without this kind of regulatory discretion. But what happens if the regulators’ word is empty?

George Hostetter
George Hostetter is The Sun’s Fresno Civic contributor – covering the City of Fresno, County of Fresno, and Fresno Council of Governments.

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