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6.01 Urgency Ordinance Relating to Temporary Moratorium on Commercial Evictions 8200 Westminster Boulevard City of Westminster Westminster, California 92683 Staff Report File #:21-06,Item #:6.1 Meeting Date: Westminster City Council To:Honorable Mayor and City Council Thru:Marwan N. Youssef, City Manager From:Christian L. Bettenhausen, City Attorney Reviewed by:Erin Backs, Interim Finance Director Prepared by:Christian L. Bettenhausen, City Attorney SUBJECT: Urgency Ordinance Relating to Temporary Moratorium on Commercial Evictions. RECOMMENDED ACTION/MOTION: StaffrecommendsthattheMayorandCityCouncilconsiderthepotentialadoptionofUrgency OrdinanceNo.2571entitled,“ANURGENCYORDINANCEOFTHEMAYORANDCITYCOUNCIL OFTHECITYOFWESTMINSTER,AMENDINGURGENCYORDINANCENO.2565,RELATINGTO ATEMPORARYMORATORIUMONCOMMERCIALEVICTIONS,ANDDECLARINGTHE ORDINANCETOBEANEMERGENCYMEASURETOTAKEEFFECTIMMEDIATELYUPON ADOPTION,“ read by title only and waive further reading. BACKGROUND/DISCUSSION: AtthemeetingheldonFebruary10,2021,theCityCouncilconsideredthepotentialadoptionofan urgencyordinancethatwouldhaveextendedthecurrentcommercialevictionprotectionsuntil February28,2021,afterwhichtheywouldterminate.Afteranextensivediscussion,theCouncil expressedconcernthattheordinancedidnotprovidesufficienttimeforcommercialtenantstorepay pastdueamountsoncetheprotectionsintheordinancehadended.Theoriginalordinanceonly allowedtenantsfourmonthstorepayanypastdueamounts.TheCouncilfeltthatadditionaltime neededtobeaddedbecausethepandemichaslastedmuchlongerthanwasoriginallyanticipated backinMarch2020,andamountsthatwerenowowedwerelikelytobemuchlargerthanwere contemplated at that time. City of WestminsterPage 1 of 3Printed on 2/18/2021 powered by Legistar™ File #:21-06,Item #:6.1 Meeting Date: BasedonCouncildirection,theCityAttorney’sOfficehaspreparedtwoversionsoftheurgency ordinanceforconsideration.Bothversionsprovideforaterminationofthecommercialeviction protections as of February 28, 2021. Version1(Attachment1)oftheproposedurgencyordinance,ifadopted,(1)encourageslandlords andtenantstocometoamutuallyagreeablearrangementastotherepaymentofpastduerent;and (2)providesthatifanagreementcannotbereached,thenthetenantwillbeallowedupto22months torepaythoseamounts.Itgoestostatethatinordertobeprotectedthetenantmustbeinfull compliance of all of its obligations under the Urgency Ordinance. Version2(Attachment2)oftheproposedurgencyordinanceisthesameasversion1,withacouple modifications as follows: A.Itprovidesthattenanthas12months(insteadof22months)torepaythepastdue amounts. B.Languagewasalsoaddedtostatethatthetenantisobligatedtostartmaking certainminimumpaymentstothelandlordbeginningonMarch1,2021. Specifically:1.StartingonMarch1,2021,thetenantmustbegintopaytheircurrent monthlyrentinfull,andcontinuetodosoeachmonththereafter.2.Thetenant th mustalsopay,atminimum,1/12oftheamountthatwaspastdueasofMarch1, 2021.Thesepaymentsmustcontinueuntilallofthepastdueamountsarepaidin full. AcopyoftheoriginalOrdinanceNo.2565(Attachment3)isattachedforreference.Asstatedinthe originalOrdinance,inorderforacommercialtenanttoqualifyfortheevictionprotections,thetenant must comply with each of the following requirements: o NotifythelandlordinwritingbeforetherentisdueofthesubstantialCOVID-19-related financial impacts they had incurred; and o Within30daysaftertherentwasdue,providereasonabledocumentation"inwriting" establishing such substantial COVID-19-related financial impacts; and o Onorbeforethedaytherentwasdue,thetenantmustpaynolessthanthefullamount ofrentcurrentlydue,lesstheamountofCOVID-19-relatedfinancialimpactsthetenant has reasonably proven. o Theamountsofunpaidrentwouldthenberepaidinaccordancewiththeproposed Repayment of Rent section (as amended at tonight’s meeting). FISCAL IMPACT: None. City of WestminsterPage 2 of 3Printed on 2/18/2021 powered by Legistar™ File #:21-06,Item #:6.1 Meeting Date: ATTACHMENTS: 1.Proposed Urgency Ordinance No. 2571 (Version 1) 2.Proposed Urgency Ordinance No. 2571 (Version 2) 3.Urgency Ordinance No. 2565, Adopted March 27, 2020 City of WestminsterPage 3 of 3Printed on 2/18/2021 powered by Legistar™ VERSION 1 ORDINANCE NO. 2571 AN URGENCY ORDINANCE OF THE MAYOR AND CITY COUNCIL OF THE CITY OF WESTMINSTER, AMENDING URGENCY ORDINANCE NO. 2565, RELATING TO A TEMPORARY MORATORIUM ON COMMERCIAL EVICTIONS, AND DECLARING THE ORDINANCE TO BE AN EMERGENCY MEASURE TO TAKE EFFECT IMMEDIATELY UPON ADOPTION WHEREAS, on March 4, 2020, the Governor declared a State of Emergency in California due to the threat of Coronavirus Disease 2019 (“COVID-19”); and WHEREAS, on March 18, 2020, the Westminster Interim City Manager, acting as the Director of Emergency Services for the City of Westminster (“City”), declared a local emergency due to COVID-19. That decision was ratified by the City Council at its March 19, 2020 Council meeting; and WHEREAS, on March 16, 2020, the Governor issued Executive Order N-28-20, which suspended any state law that would preempt or otherwise restrict the City’s exercise of its police power to impose substantive limitations on evictions based on nonpayment of rent resulting from the impacts of COVID-19; and WHEREAS, on March 27, 2020, consistent with the Governor’s order, the City Council adopted Ordinance No. 2565, which enacted a temporary moratorium on evictions for both residential and commercial tenants; and WHEREAS, subsequently, on August 31, 2020, the state legislature enacted AB 3088, which established a statewide prohibition on residential evictions. The adoption of this statewide legislation preempted the City’s ability to enact its own residential eviction protections. Commercial tenant protections continue to be governed by the terms of Westminster’s Ordinance 2565, and are subject to the City’s Council’s discretion as to its duration and terms; and WHEREAS, the City Council seeks to provide a reasonable balance between providing commercial tenants with the short-term protections afforded to them during the last year, and the rights of the commercial property owners many of whom have been unable to meet their own obligations as a result of the loss of rental income; and WHEREAS, in balancing all of the competing interests and taking all current factors into account, including the presence of rental assistance programs for tenants, the City Council has determined that the Commercial evictions protections in Ordinance 2565 should be extended up through February 28, 2021, at which point they would end. By so doing, commercial tenants will have been provided with eviction protections for almost an entire year; and 2571-1 VERSION 1 WHEREAS, the City Council has the authority to adopt this ordinance under Government Code Section 8630, California Constitution Art XI, section 7, and pursuant to the Governor’s Order N-28-20. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WESTMINSTER DOES ORDAIN AS FOLLOWS: SECTION 1. Paragraph A, of Section 1, of Ordinance No. 2565, is hereby deleted and the following is substituted in in place: A. Term. Section 1 shall remain in effect until 11:59 p.m. on February 28, 2021, at which point it shall terminate (the “Term”). Notwithstanding the termination, the provisions of Paragraph G dealing with Repayment of Rent shall continue in full force and effect for the period indicated in that paragraph. SECTION 2. Paragraph G, of Section 1, of Ordinance No. 2565, is hereby deleted and the following is substituted in in place: G. Repayment of Rent. 1. Nothing in this ordinance shall relieve the tenant of liability for any unpaid rent. After expiration of the Term, the landlord may seek repayment of any unpaid rent in accordance with state law. The repayment of rent is subject to the following terms: (a) landlord and tenant are encouraged to work out a mutually agreeable written agreement on the repayment of amounts due; (b) If the landlord and tenant are unable to reach an agreement, and the tenant is in full compliance with the requirements of Ordinance 2565 as amended, then the tenant will be allowed up to 22 months (until January 1, 2023) to make repayment of all amounts past due that were proven to be “COVID-19 Related Financial Impacts” as defined in this Ordinance No. 2565. 2. A landlord may not charge or collect penalties or late fees for rent that is delayed for the reasons stated in this Ordinance; nor may a landlord, use the eviction process to collect past due amounts if such amounts are not required to be paid as set forth herein, unless the Tenant has not complied with all of tenant’s obligations under this Ordinance. SECTION 3. No Other Amendments. Except for the amendments, releases, authorizations and waivers specifically set forth above, Ordinance No. 2565 shall remain unchanged and in full force and effect. SECTION 4. Emergency Declaration/Effective Date. The City Council declares this ordinance to be an emergency measure, to take effect immediately upon adoption pursuant to California Government Code section 36934. The facts constituting the 2571-2 VERSION 1 emergency are as follows: the directives from health officials to contain the spread of COVID-19 has resulted in loss of business, furloughs, loss of wages, and lack of work for employees. To protect the public health, safety, and welfare, the city must act to provide reasonable eviction protections for commercial tenants, to balance the interests and impacts between tenants and property owners. This urgency ordinance is necessary to provide a reasonable extension to the current protections for a temporary period during the pendency of the COVID-19 crisis. SECTION 5. Future Governor’s Order. If the Governor issues an executive order, or if state legislation is adopted, either of which supersedes the enforcement of Ordinance 2565 as amended by this ordinance, then that order or legislation shall control, and Ordinance 2565, as amended by this ordinance, shall no longer be in effect. Otherwise, this ordinance shall remain in full effect through its expiration date, and landlords and tenants must meet the requirements of both this Ordinance and the Executive Order or state legislation. SECTION 6. Severability. If any portion of this ordinance is found to be unenforceable, each such provision shall be severed, and all remaining portions of this ordinance shall be enforced to the maximum extent legally permissible. SECTION 7. Certification. The City Clerk shall certify to the passage and adoption of this ordinance as required by law. th PASSED, APPROVED AND ADOPTED this 24 day of February 2021 by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ______________________________ TRI TA, MAYOR ATTEST: _______________________________ CHRISTINE CORDON, CITY CLERK 2571-3 VERSION 1 APPROVED AS TO FORM: ________________________________ CHRISTIAN L. BETTENHAUSEN, CITY ATTORNEY STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF WESTMINSTER ) I, CHRISTINE CORDON, City Clerk of Westminster, do hereby certify that the th foregoing ordinance was introduced and adopted at a regular meeting on the 24 day of February 2021, and was published/posted pursuant to law. ________________________________ Christine Cordon City Clerk 2571-4 VERSION 2 ORDINANCE NO. 2571 AN URGENCY ORDINANCE OF THE MAYOR AND CITY COUNCIL OF THE CITY OF WESTMINSTER, AMENDING URGENCY ORDINANCE NO. 2565, RELATING TO A TEMPORARY MORATORIUM ON COMMERCIAL EVICTIONS, AND DECLARING THE ORDINANCE TO BE AN EMERGENCY MEASURE TO TAKE EFFECT IMMEDIATELY UPON ADOPTION WHEREAS, on March 4, 2020, the Governor declared a State of Emergency in California due to the threat of Coronavirus Disease 2019 (“COVID-19”); and WHEREAS, on March 18, 2020, the Westminster Interim City Manager, acting as the Director of Emergency Services for the City of Westminster (“City”), declared a local emergency due to COVID-19. That decision was ratified by the City Council at its March 19, 2020 Council meeting; and WHEREAS, on March 16, 2020, the Governor issued Executive Order N-28-20, which suspended any state law that would preempt or otherwise restrict the City’s exercise of its police power to impose substantive limitations on evictions based on nonpayment of rent resulting from the impacts of COVID-19; and WHEREAS, on March 27, 2020, consistent with the Governor’s order, the City Council adopted Urgency Ordinance 2565, which enacted a temporary moratorium on evictions for both residential and commercial tenants; and WHEREAS, subsequently, on August 31, 2020, the state legislature enacted AB 3088, which established a statewide prohibition on residential evictions. The adoption of this statewide legislation preempted the City’s ability to enact its own residential eviction protections. Commercial tenant protections continue to be governed by the terms of Westminster’s Ordinance 2565, and are subject to the City’s Council’s discretion as to its duration and terms; and WHEREAS, the City Council seeks to provide a reasonable balance between providing commercial tenants with the short-term protections afforded to them during the last year, and the rights of the commercial property owners many of whom have been unable to meet their own obligations as a result of the loss of rental income; and WHEREAS, in balancing all of the competing interests and taking all current factors into account, including the presence of rental assistance programs for tenants, the City Council has determined that the Commercial evictions protections in Ordinance 2565 should be extended up through February 28, 2021, at which point they would end. By so doing, commercial tenants will have been provided with eviction protections for almost an entire year; and 2571-1 VERSION 2 WHEREAS, the City Council has the authority to adopt this ordinance under Government Code Section 8630, California Constitution Art XI, section 7, and pursuant to the Governor’s Order N-28-20. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF WESTMINSTER DOES ORDAIN AS FOLLOWS: SECTION 1. Paragraph A, of Section 1, of Ordinance 2565, is hereby deleted and the following is substituted in in place: A. Term. Section 1 shall remain in effect until 11:59 p.m. on February 28, 2021, at which point it shall terminate (the “Term”). Notwithstanding the termination, the provisions of Paragraph G dealing with Repayment of Rent shall continue in full force and effect for the period indicated in that paragraph. SECTION 2. Paragraph G, of Section 1, of Ordinance 2565, is hereby deleted and the following is substituted in in place: G. Repayment of Rent. 1. Nothing in this ordinance shall relieve the tenant of liability for any unpaid rent. After expiration of the Term, the landlord may seek repayment of any unpaid rent in accordance with state law. The repayment of rent is subject to the following terms: (a) landlord and tenant are encouraged to work out a mutually agreeable written agreement on the repayment of amounts due; (b) If the landlord and tenant are unable to reach an agreement, and the tenant is in full compliance with the requirements of Ordinance 2565 as amended, then the tenant will be allowed up to 12 months (until March 1, 2022) to make repayment of all amounts past due that were proven to be “COVID-19 Related Financial Impacts” as defined in this Ordinance 2565. 2. Unless a mutually agreeable written arrangement is reached between the landlord and tenant, in order for a commercial tenant to avail themselves of the repayment protections in this Ordinance, the tenant must comply with the following minimum payment obligations. Starting on March 1, 2021, and for each month thereafter until all past due amounts are paid in full, tenant must pay, at minimum, the current month’s rent in full, plus at least one twelfth (1/12) of all amounts that were past due on March 1, 2021 due to COVID-19 Related Financial Impacts. 3. A landlord may not charge or collect penalties or late fees for rent that is delayed for the reasons stated in this Ordinance; nor may a landlord, 2571-2 VERSION 2 use the eviction process to collect past due amounts if such amounts are not required to be paid as set forth herein, unless the Tenant has not complied with all of tenant’s obligations under this Ordinance. SECTION 3. No Other Amendments. Except for the amendments, releases, authorizations and waivers specifically set forth above, Ordinance 2565 shall remain unchanged and in full force and effect. SECTION 4. Emergency Declaration/Effective Date. The City Council declares this ordinance to be an emergency measure, to take effect immediately upon adoption pursuant to California Government Code section 36934. The facts constituting the emergency are as follows: the directives from health officials to contain the spread of COVID-19 has resulted in loss of business, furloughs, loss of wages, and lack of work for employees. To protect the public health, safety, and welfare, the city must act to provide reasonable eviction protections for commercial tenants, to balance the interests and impacts between tenants and property owners. This urgency ordinance is necessary to provide a reasonable extension to the current protections for a temporary period during the pendency of the COVID-19 crisis. SECTION 5. Future Governor’s Order. If the Governor issues an executive order, or if state legislation is adopted, either of which supersedes the enforcement of Ordinance 2565 as amended by this ordinance, then that order or legislation shall control, and Ordinance 2565, as amended by this ordinance, shall no longer be in effect. Otherwise, this ordinance shall remain in full effect through its expiration date, and landlords and tenants must meet the requirements of both this Ordinance and the Executive Order or state legislation. SECTION 6. Severability. If any portion of this ordinance is found to be unenforceable, each such provision shall be severed, and all remaining portions of this ordinance shall be enforced to the maximum extent legally permissible. SECTION 7. Certification. The City Clerk shall certify to the passage and adoption of this ordinance as required by law. th PASSED, APPROVED AND ADOPTED this 24 day of February 2021 by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ______________________________ TRI TA, MAYOR 2571-3 VERSION 2 ATTEST: _______________________________ CHRISTINE CORDON, CITY CLERK APPROVED AS TO FORM: ________________________________ CHRISTIAN L. BETTENHAUSEN, CITY ATTORNEY STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF WESTMINSTER ) I, CHRISTINE CORDON, City Clerk of Westminster, do hereby certify that the th foregoing ordinance was introduced and adopted at a regular meeting on the 24 day of February 2021, and was published/posted pursuant to law. ________________________________ Christine Cordon City Clerk 2571-4