§ 8.57.080. Capital improvement pass-through.

A.

Subject to the vote requirements and the capital improvement limitations hereafter described, and also subject to review by the commission pursuant to Section 8.57.100 of this chapter, the actual net costs of a capital improvement plus an interest charge to compensate the owner for the use of money in making the improvement, as described below, may be passed through to the tenant upon 60 days' written notice, using the following formula: Net amount actually paid by the owner for capital improvement, plus an interest charge as described below, divided by the total number of homesites in the mobilehome park affected by the improvement, divided by 60 months (the amortization period for the capital improvement) equals the monthly sum for capital improvements to be passed through to the tenants.

B.

The interest charge that may be added to the costs of materials and labor is 33.5 percent. This is derived from the 12-percent interest rate used by the Internal Revenue Service in calculating overpayment and underpayment of federal income taxes, computed on a declining balance over a five-year period with equal monthly payments (the five-year period represents the amount of time allowed for fully amortizing the cost of capital improvements).

C.

Alternative Amortization Periods and Interest Charges.

Period:	120 months	Interest Charge:	72.2% of actual costs
	108 months		64.0% of actual costs
	96 months		56.0% of actual costs
	84 months		48.3% of actual costs
	72 months		40.1% of actual costs
	60 months		33.5% of actual costs
	36 months		19.1% of actual costs
	12 months		6.6% of actual costs

 

D.

Installation of individual capital improvements with a cost to owner which would result in a pass-through monthly payment to affected tenants in excess of five percent of base rent shall be contingent upon the majority approval of all affected tenants of the mobilehome park. Tenants at such elections to approve or reject a proposed capital improvement shall be entitled to one written ballot vote per affected space in the mobilehome park. Individual capital improvements costing less than the amount that would result in a pass-through monthly payment to affected tenants in excess of five percent of base rent shall not require the approval of tenants of the mobilehome park so long as the cumulative total of pass-through monthly payments resulting from such projects does not exceed 10 percent of base rent hereafter described. Capital improvement projects mandated by governmental authorities to protect the health or safety of the mobilehome park by tenant shall be exempt from the tenant-vote requirement described in this subsection.

E.

Capital improvements which may be passed through to tenants shall not exceed a total of 10 percent base rent, unless approved by 50 percent plus one of the tenants, with the exception of projects mandated by governmental authorities, as described above. However, the cost of capital improvement projects mandated by governmental authority shall be included in the calculation of the 10 percent of base rent limitation described in this section for purposes of determining whether a capital improvement project not mandated by governmental authority requires approval of the tenants.

(Ord. 87-0228 §§ 1 (part), 9, 1987.)