2021-03-16 CC Agenda Packet - ITEM #12 - PRESENTATION - Park Vista ReportPark Vista:
State of the Union
Paul Lanyi for the PV Board
March 16, 2021
Background
Current State
Future Challenges
overview�.. �
Board Discussions/Decisions
City Council To Consider
Park Vista Background
Senior living facility
Built in1987
• 97 residential units
Rent for current units at N50% of 2019 market rates
0 1 bedroom = $960/month
o Studio = $705/month
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Park Vista Background (continued)
• On average 4 units turn each year
• Approximately 75% of 97 units not paying 50% of market rates
o Some residents have been at PV for 30 years
o Others, average tenure 15 - 20 years
o Loss to market = $23K/Month. If all tenants @50% rent would be
$84K, today gross rent = $61K
• Rent increases of 1- 2% have been passed sporadically by the Board
• Held first joint Future discussion in 2019 with the City including Public
Works, Finance, The Cadman Group and members of the Board
o Reviewed Replacement Reserves Report visa vis finances
ILI
The Big Questions
• What is the purpose of Park Vista?
• To what degree must it support itself?
Current status
6 units vacant
COV I D-19 healthy
PV holds N$1.5M in financial reserves (not including the
City's Senior Housing Fund 504)
* Terms expired for two Board members in 2020. New
members hopefully within 3 months.
Future ChaLlenges
• $3.5M worth of projects identified in City Replacement Reserves
Report to be accomplished by 2031, $2.3M by 2027
• Park Vista, undercurrent practices and plans and using PV reserves
only, will go into the red by 2032 and be far below Reserve guidelines
established by City Finance
• The delta may be offset by City -managed Senior Housing Fund 504
which is held by the City, not necessarily to be used for Park Vista.
(Approx $1M in Fund 504)
• How do we mitigate the financial challenges?
Options
• The City, The Cadman Group and members of the Park Vista Board have
discussed multiple scenarios to potentially make up the delta
o ® Increased rents on current residents by 2% for 2021 as of Feb 1 by
Board vote on Nov 24
o Increase rents on new rentals to another rate
■ Move from 50 to 60% approved by Board on 11/24 to take to City
Council for approval
o Increase internal transfer rental rates
o Increase parking fees
o Monthly cable fee added to current and new rents
o Unit repair beyond normal wear and tear assessed to each unit
Financial Scenarios
2% increase on rents each year through 2040 & all rentals remain at 50% of market
rate at time of entry into the facility
• PV reserves fall below target reserve level in 2026 & negative reserves in 2032-40
• Target reserve level = three years of capital, plus 15% of operating budget
• PV reserves are estimated to be-$500,000 in 2032, peaking at-$920,000 in
2038, and-$340,000 in 2040
With use of the City's Fund 504, the reserves fall below target reserve level in
2030 through 2040
Total reserves are estimated to be $18,000 in 2038 and improve to $600,000
in 2040
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Financial Scenarios
2% increase on rents each year through 2040 & all new rentals are assessed at 60% of market
rate at time of entry into the facility
• PV reserves fall below target reserve level in 2026 & negative reserves in 2032-2034
• Return to positive reserves in 2035 and thereafter
• Reserve levels remain below the target level through 2040
0 PV reserves are estimated to be-$51,000 in 2032,-$295,000 in 2033, and-$142,000 in
2034
0 PV reserves are positive in 2035 with $280,000 and increase to $910,000 by 2040
• With use of the City's Fund 504, the reserves fall below target reserve level in 2030-2039
• Return to target reserve level in 2040
0 Total reserves are at its lowest level in 2034 at $800,000 and improve to $1,850,000 in
2040
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City CounciL To Consider
* Concern by residents and Board re the RFQ for a Housing Authority
The City owns the 97-unit Park Vista senior citizen housing project, which is restricted to low
and moderate income households. The respondents chosen through this RFQ process may
be tasked with effectively managing this property, whether in-house or through a qualified
third -party property management company. The City may also potentially offer to sell this
project to the selected respondents.
Should the PV Board assume that the City's 504 funds can be used to fund
replacement activities?
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Our ASKs / for city CounciL to consider
i ASK #1: Increase rents for new renters to 60% of market rates vs. current 50%
o Generates an additional $1.2 million in income through 2040
a ASK #2: Increase rents for transfers to 100% of current internal (not market) rate
o Single to single
o Single to 1BR
o Internal move: Eliminate 2x strike rule from waiting list when the resident
desires to move from studio to 1BR.
ASK #3: Increase parking rates (first time in 15+ year) by $2.50 month for both
inside and outside spaces, currently at $27.50 and $17.50 per month external and
internal respectively. And add 2% increase per year thereafter.
• Initial increase would generate $1,800/year & inflation index would add an
additional $650+/year in subsequent years
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The Big Questions
■ What is the purpose of Park Vista?
• To what degree must it support itself?
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