08 Staff Report - Below Market Price Housing Terraces of Los GatosCOUNCIL AGENDA REPORT
DATE: January 28, 2003
TO: MAYOR AND TOWN COUNCIL
FROM: DEBRA J. FIGONE, TOWN MANAGER
SUBJECT:
MEETING DATE: 2/3/02
ITEM NO.
ADOPT RESOLUTION AUTHORIZING THE TOWN MANAGER TO
EXECUTE AN AMENDMENT TO AGREEMENT WITH AMERICAN
BAPTIST HOMES OF THE WEST, INC., REGARDING BELOW MARKET
PRICE HOUSING AT THE TERRACES OF LOS GATOS
RECOMMENDATION:
Adopt Resolution Authorizing the Town Manager to execute an Amendment to Agreement with
American Baptist Homes of the West, Inc., regarding Below Market Price Housing at The Terraces
of Los Gatos.
BACKGROUND:
American Baptist Homes of the West, Inc. (ABHOW) owns and operates The Terraces of Los Gatos,
a Licensed Residential Care Facility for the Elderly and a Continuing Care Retirement Community
regulated by the State ofCalifornia, located at 800 Blossom Hill Road. When the Terraces was built,
it fell under the Town's Inclusionary Zoning Ordinance, which requires developers to provide.a
specified number of affordable owner -occupied or rental units, as appropriate, in their new housing
projects. All units developed under the ordinance are regulated by the Town's Below Market Price
(BMP) Housing Program.
Under the BMP Program, ABHOW agreed to provide 29 rental units at the Terraces at discount
rates, to income -eligible seniors. In 1993, the Town and ABHOW executed the "Agreement
Between American Baptist Homes of the West, Inc., and the Town of Los Gatos Relating to Below
Market Price Housing at the Terraces," which governs the rental of these 29 units.
The purpose of the changes proposed in this report is twofold: first, to allow for choice on the part
of Terraces BMP unit residents about how they receive their BMP program discount; and second,
to ensure that existing Terraces BMP unit residents do not lose their BMP program discount when
they move to a higher level of care.
PREPARED BY:
Regina A. Falkplr\
Community Se .4 Director
•
Reviewed by: PS S Assistant Town Manager
Town Attorney Clerkj[Finance
Community Development Revised: 1 29 03 2:18 pm
R formatted: 5'30.02
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT RESOLUTION AUTHORIZING THE TOWN MANAGER TO
EXECUTE AN AMENDMENT TO AGREEMENT WITH AMERICAN
BAPTIST HOMES OF THE WEST, INC.
January 28, 2003
DISCUSSION:
The Terraces offers three levels of care to its residents. In Residential Living, residents live in
traditional apartment -like units, with limited meal and housekeeping services provided by the
Terraces. While in Residential Care, residents may request the optional "Residential Plus" service,
for a flat per -month fee, which provides increased meal, housekeeping, and personal care services.
Residential Plus is typically requested for a short time period, as following an illness or surgery. In
the second level of care, Assisted Living, residents move to smaller living units, and receive
increasing levels of meal, housekeeping, and personal services from Terraces staff. In the Health
Center, residents live in a healthcare setting, with constant staff attention. In the Residential Living
and Assisted Living units, residents pay a one-time entry fee, and a monthly service fee. In the
Health Center, residents pay a per -day fee.
Once residents are admitted to the Terraces, and have paid their entry fee, they are guaranteed care
for their lifetime, regardless of their ability to pay. In other words, if a Terraces resident outlives his
or her assets, and is no longer able to pay a monthly service fee. he or she may remain at the
Terraces, with all fees paid for by ABHOW.
Under the existing BMP contract with the Terraces, 29 residents of the Residential Living units
receive a discount on their monthly service fee. These residents must have an income of 80 percent
or less of the area median, as defined by the federal Department of Housing and Urban Development
(HUD). Currently, for a one -person household, annual household income must be $51,950 or less
to qualify. The amount of discount is determined by the size of the unit. Residents of these BMP
units are covered by the same guarantee of lifetime care as all other Terraces residents.
ABHOW would like to extend the BMP discounts to residents of the Assisted Living units. It feels
that residents who move from the Residential Living to Assisted Living level of care experience a
hardship, as they lose their BMP discount at the same time that their monthly service fee is
increased. It recommends that the level of discount for the Assisted Living units be the same as that
for the smallest Residential Living unit, as the Assisted Living units are all the same size, and
smaller than the Residential Living units. ABHOW also suggests that residents be given the option
of either receiving a discount on their monthly service fee, or a discount on the one-time entry fee.
Residents who move to the Terraces after selling their home, but who may not have a steady monthly
income, might prefer to pay the full one-time entry fee, but receive a discount on their monthly
service fee. Residents who do not have a sizeable amount of capital, but who do have steady
income, may prefer to pay a discounted one-time entry fee, and the full monthly service fee.
Receiving the discount on either the one-time entry fee or on the monthly service fee would be at
the discretion of the resident. Finally, ABHOW suggests that residents of the Residential Living
BMP units be allowed a discount on the optional "Residential Plus" service, should they require it.
The total number of residents receiving a BMP discount would remain at 29. A summary of the
proposed changes follows:
PAGE 3
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT RESOLUTION AUTHORIZING THE TOWN MANAGER TO
EXECUTE AN AMENDMENT TO AGREEMENT WITH AMERICAN
BAPTIST HOMES OF THE WEST, INC.
January 28, 2003
Level of Care
Existing
Monthly Discount
Proposed
Monthly Discount
Existing
Entry Discount
Proposed
Entry Discount
Residential Living
Alcove
12.5%
12.5%
0
12.5% x 81.2
months
1 Bed/1 Person
18.2%
18.2%
0
18.2% x 81.2
months
1 Bed/2 Persons
14.7%
14.7%
0
14.7% x 81.2
months .
"Residential
Plus" service
0
12.5%
n/a
n/a
Assisted Living
Level I
0
12.5%
0
12.5% x 31.6
months
Level II
0
12.5%
0
Level [II
0
12.5%
0
The amount of discount on the one-time entry fee would be calculated by multiplying the amount
of discount on the monthly service fee, by the national average length of stay in a residential care
facility. As of 1997, the national average length of stay was 81.2 months for Residential Living, and
31.6 months for Assisted Living, as determined by the accounting firm of Coopers & Lybrand. For
example, consider the fees for an alcove (studio) unit, based on the 2003 Terraces Fee Schedule:
'Monthly fee
Discounted
Monthly Fee
Entry Fee
Discounted
Entry Fee
S2,195.00
$ 1,920.63
S 139,000.00
S 116,720.75
These proposed changes would formalize the informal agreement struck between the Town and
ABHOW in 1999 - at that time, the Terraces was experiencing difficulty in finding residents for all
of the 29 BMP units. ABHOW recommended, and former Town Manger David Knapp accepted via
letter, extending the BMP discount to residents of the Assisted Living units, and offering the option
of a discount on the entry fee. This approach was successful, and all 29 units are now occupied.
A draft Amendment is attached as Exhibit A.
PAGE 4
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT RESOLUTION AUTHORIZING THE TOWN MANAGER TO
EXECUTE AN AMENDMENT TO AGREEMENT WITH AMERICAN
BAPTIST HOMES OF THE WEST, INC.
January 28, 2003
CONCLUSION:
Staff agrees that extending a BMP discount to residents of Assisted Living would be of benefit to
these lower -income senior residents of Los Gatos. Staff also agrees that providing a choice between
a discount on the one-time entry fee and on the monthly service fee would allow residents to make
a decision that works best for them. Terraces staff has stated that. ;riven this choice, most residents
would choose a discount on the monthly service fee.
ENVIRONMENTAL ASSESSMENT:
The recommended action is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT:
The recommended action would have no fiscal impact on the Town. Administration of the BMP
Program is included in the Community Services Department's operating budget.
Attachments:
1. Draft Resolution authorizing the Town Manager to Execute an amendment to the agreement
with American Baptist Homes of the West, Inc. regarding below market price housing at the
Terraces of Los Gatos (with Exhibit A)
Distribution:
Pamela Bancroft, Community Relations Director, The Terraces of Los Gatos
Alex Candalla, Executive Director, The Terraces of Los Gatos
RAF:JLM/
N: CSD.TCRPTS'.terracesrates.wpd
Attachment 1
RESOLUTION NO.
RESOLUTION OF THE TOWN OF LOS GATOS
AUTHORIZING THE TOWN MANAGER TO EXECUTE AN AMENDMENT TO
AGREEMENT WITH AMERICAN BAPTIST HOMES OF THE WEST, INC.
FOR BELOW MARKET PRICE HOUSING AT THE TERRACES OF LOS GATOS
WHEREAS, the Terraces of Los Gatos is a Licensed Residential Care Facility for
the Elderly and a Continuing Care Retirement Community regulated by the State of California,
located at 800 Blossom Hill Road in Los Gatos, and owned and operated by American Baptist
Homes of the West, Inc., (ABHOW); and,
WHEREAS, Town and ABHOW executed the "Agreement Between American
Baptist Homes of the West, Inc., and the Town of Los Gatos Relating to Below Market Price
Housing at the Terraces," dated April 12, 1993; and,
WHEREAS, this Agreement extends a Below Market Price discount to the monthly
service fees of residents of the Terraces's Residential Living apartments only; and,
U
WHEREAS, TOWN and CONTRACTOR wish to amend this Agreement in order
to extend Below Market Price considerations to residents of the Terraces's Assisted Living, and
to allow for choice on the part of residents regarding the timing of such considerations.
RESOLVED, by the Town Council of the Town of Los Gatos, County of Santa
Clara, State of California, that the Town of Los Gatos enter into an amendment to the agreement
with American Baptist Homes of the West, Inc. for Below Market Price Housing at the Terraces,
and that the Town Manager is authorized, and is hereby directed, to execute said agreement in
the name and on behalf of the Town of Los Gatos.
U
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town
of Los Gatos, Calitbrnia, held on the third day of February, 2003 by the tollowing vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
N:1CSD\TCRPTS\Resolutions\Terraces Amendment.wpd
Exhibit A
AMENDMENT TO AGREEMENT
BY AND BETWEEN THE TOWN OF LOS GATOS AND
AMERICAN BAPTIST HOMES OF THE WEST, INC.
RELATING TO BELOW MARKET PRICE HOUSING AT THE TERRACES
This Amendment to Agreement, is made and entered into this day of
2003, and is effective as of the day of , 2003, by and between the
Town of Los Gatos, a municipal corporation of the State of California, (hereinafter referred to as
"TOWN") and American Baptist Homes of the West, Inc., (herein after referred to as
"ABHOW"), to provide housing and services at reduced rates to eligible senior citizens as part of
the Terraces Program.
Whereas, the Terraces of Los Gatos is a Licensed Residential Care Facility for the Elderly
and a Continuing Care Retirement Community regulated by the State of California, located at
800 Blossom Hill Road in Los Gatos, and owned and operated by ABHOW; and,
Whereas, Town and ABHOW executed the "Agreement Between American Baptist
Homes of the West, Inc., and the Town of Los Gatos Relating to Below Market Price Housing at
the Terraces," dated April 12, 1993; and,
Whereas, this Agreement extends a Below Market Price discount to the monthly service
fees of residents of the Terraces's Residential Living apartments only; and,
Whereas, TOWN and CONTRACTOR wish to amend this Agreement in order to extend
Below Market Price considerations to residents of the Terraces's Assisted Living, and to allow
for choice on the part of residents regarding the timing of such considerations.
Now therefore, the parties hereto agree as follows:
1. Section 2 of the Agreement, "Below Market Price Monthly Service Fees," shall be
amended to read as follows:
Et is understood by both parties to this Agreement that ABHOW will charge
tenants of the Terraces both a one-time entry fee and a monthly service fee. The
monthly service fee includes both service and shelter elements. ABHOW agrees
to rent 29 units located at the Terraces to eligible senior citizens in accordance
with the standards provided in this Agreement, and shall provide said tenants a
discount on either their one-time entry fee, or on their monthly service fee, at the
discretion of said tenants.
The dollar amount of discount on the monthly service fee shall be determined by
discretion of said tenants.
The dollar amount of discount on the monthly service fee shall be determined by
multiplying the market rate listed in the most current Terraces of Los Gatos Fee
Schedule. for the type of unit occupied, by the appropriate following percentage:
Alcove 12.5 percent
1 Bedroom/ 1 Person 18.2 percent
1 Bedroom/2 Persons 14.7 percent
Residential Plus service 12.5 percent
Assisted Living (Levels I, II, and III) 12.5 percent
The dollar amount of discount on the one-time entry fee shall be determined by
multiplying the monthly service fee discount, as calculated above, by the national
average length of stay in a residential care facility. As of 1997, the national
average length of stay was 81.2 months for Residential Living, and 31.6 months
for Assisted Living, as determined by the accounting firm of Coopers & Lybrand.
The terms and conditions of the April 13, 1993 Agreement shall remain in full force and
effect except as herein expressly amended.
In witness whereof, the parties have executed this Amendment to Agreement on the date written
above, effective , 2003.
TOWN OF LOS GATOS AMERICAN BAPTIST HOMES OF THE
Debra J. Figone, Town Manager
Approved as to Content:
Regina A. Falkner
Community Services Director
Approved as to Form:
Orry P. Korb, Town Attorney
ATTEST:
Clerk of the Town of Los Gatos,
Los Gatos, California
Marian V. Cosgrove, Town Clerk
N:\CSD`BMP\terracesamendment2003, wpd
ESL 1TE-7K Q
OFFICE OF THE TOWN CLERK
ORDINANCES & RESOLUTIONS
ORIGINATING DEPT:
COUNCIL AGENDA DATE:
COUNCIL AGENDA ITEM:
SUBJECT:
CS
M? • I N 1 c tLtZ.ACS
k- t vvk ES
RESOLUTION ORDINANCE
Number: '20(53-- I J Number:
Date of Adopt: � 3 )03 Date of Intro:
Date of Adopt:
ZONE CHANGE:
COUNCIL ACTION:
AYES:
NAYS:
ABSENT:
ABSTAIN:
COUNCIL MEMBERS NAMES:
Steve Glickman, Diane McNutt, Joe Pirzynski, Mike Wasserman
Mayor (or Chairman) SANDY DECKER
ORDINANCES and RESOLUTIONS MUST BE RETURNED TO TOWN CLERK
BY WEDNESDAY AT 12 NOON.
ORDINANCES MUST BE READY FOR IMMEDIATE PUBLICATION
CLK.FORMS-RESO-ORD
RESOLUTION 2003 - 013
RESOLUTION OF THE TOWN OF LOS GATOS
AUTHORIZING THE TOWN MANAGER TO EXECUTE AN AMENDMENT TO
AGREEMENT WITH AMERICAN BAPTIST HOMES OF THE WEST, INC.
FOR BELOW MARKET PRICE HOUSING AT THE TERRACES OF LOS GATOS
WHEREAS, the Terraces of Los Gatos is a Licensed Residential Care Facility for
the Elderly and a Continuing Care Retirement Community regulated by the State of California,
located at 800 Blossom Hill Road in Los Gatos, and owned and operated by American Baptist
Homes of the West, Inc., (ABHOW); and,
WHEREAS, Town and ABHOW executed the "Agreement Between American
Baptist Homes of the West, Inc., and the Town of Los Gatos Relating to Below Market Price
Housing at the Terraces," dated April 12, 1993; and,
WHEREAS, this Agreement extends a Below Market Price discount to the monthly
service fees of residents of the Terraces's Residential Living apartments only; and,
WHEREAS, TOWN and CONTRACTOR wish to amend this Agreement in order
to extend Below Market Price considerations to residents of the Terraces's Assisted Living, and
to allow for choice on the part of residents regarding the timing of such considerations.
RESOLVED, by the Town Council of the Town of Los Gatos, County of Santa
Clara, State of California, that the Town of Los Gatos enter into an amendment to the agreement
with American Baptist Homes of the West, Inc. for Below Market Price Housing at the Terraces,
and that the Town Manager is authorized, and is hereby directed, to execute said agreement in the
name and on behalf of the Town of Los Gatos.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town
of Los Gatos, California, held on the 3'd day of February, 2003 by the following vote:
COUNCIL MEMBERS:
AYES: Steve Glickman, Diane McNutt, Joe Pirzynski, Mike Wasserman,
Mayor Sandy Decker.
NAYS: None
ABSENT: None
ABSTAIN: None
SIGNED: /s/ Sandy Decker
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
/s/ Marian V. Cosgrove
CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA