May 2013 AANC News - AANC Apartment Association of North

May 2013 AANC News - AANC Apartment Association of North

AANC NEWS
May 2013
President:
Tim Hose
Vice President:
Mindy McCorkle
Treasurer:
Kellie Falk-Tillett
Secretary:
Jody Longwill
Lobbyist:
Colleen Kochanek
Executive Director:
Ken Szymanski
AANC Mission
Statement
Le
ŒŒNC Attorney General Roy Cooper
ŒŒNC Representative Deborah Ross
(D, Wake County)
ŒŒNC Insurance Commissioner
Wayne Goodwin
ŒŒNC Fire Marshal’s Office Deputy
Commissioner Chris Noles
ŒŒHousing/Public Health Research
Scientist Sung-Jin Lee, Ph.D.
• Local Association Leaders
• Legislative Counsel Colleen
Kochanek
• Political Commentary Panel:
ŒŒKelly McCullen - Senior Correspondent/Lead Political Reporter, UNC-TV
ŒŒDavid McLennan - Political Science
Professor, Peace University
ŒŒLoretta Boniti - Senior Political
Reporter, News 14 Carolina
ŒŒJim Morrill - Political Writer, The
Charlotte Observer
7:00 - 9:00 pm - Reception at the NC
Nature Research Center
Heavy hors d’oeuvers and drinks.
WEDNESDAY, MAY 22nd
ig h
ay 2
• Welcome - AANC President Tim Hose
• Featured Guest Speakers:
1- 2 2 i n R ale
There’s still time to RSVP!
Events are FREE for AANC-member
apartment owner/operators.
Contact your local Association or
visit www.aanconline.org.
2013 Legislative Days
SPONSORS
Apartment Dynamics
7 - 8:30 am - Breakfast (Marriott)
8:45 am - shuttle bus service begins
9:00 am - noon - Visits with North
Carolina State Legislators
12:30 pm - Lunch (Marriott)
PRAET LAW FIRM, PLLC
GOLD
The Apartment
Association of North
Carolina is a statewide
organization comprised
of local apartment
associations to promote
safe, affordable housing
through participation
in the legislative
process, and through
communication to
and education of its
members, public officials
and the general public.
12:30 - 6:00 pm - Afternoon Program:
PLATINUM
AANC Officers
12:00 noon - Registration (Marriott)
M
6060 Piedmont Row Dr. S.
Suite 575
Charlotte, NC 28287
Phone: 704.334.9511
Fax: 704.333.4221
www.aanconline.org
TUESDAY, MAY 21st
SILVER
Apartment Association
of North Carolina
Schedule of Events
013
sgi lative Days 2
AANC 2013 Legislative Days
AAPCO Group • Appliance Warehouse of America, Inc.
Blue Ridge Companies •CARES by Apartment Life
CoreLogic SafeRent •CRHMI • Environmental Design Landscape
eSupply Systems • Greystar •HD Supply • IREM Chapter #56
Minol USA • NWP Services Corporation •S.L. Nusbaum Realty Co.
Servpro Raleigh NE & North Durham •SYNCO Properties
The Davey Tree Expert Company •Valet Waste Service
Watermark Restoration •Westdale Real Estate Investment & Mgmt.
AANC NEWS Page 2
What Does Your AANC Board of Directors and its Officers Really Do?
by AANC President Tim Hose
I imagine that a number of our constituents who have never attended an AANC Board meeting or been a Board
member sometimes ask themselves: What exactly do they do at those sessions, and otherwise, for the apartment
industry in North Carolina?
Our website (aanconline.org), which is continually being improved and updated by our hard-working website
committee, focuses on keeping our constituents informed about AANC activities, and does a good job of it.
However, from the perspective of the sitting president, perhaps the following may be insightful:
Tim Hose
•
We hold six Board meetings each year. Two are actual gatherings in Greensboro, and four are via GoToMeeting using
phones and computers. I try to keep the meetings under two hours, which has been achieved thus far during my twoyear term. We cover the issues thoroughly, but do not waste time over-discussing any single topic.
•
There are 19 total Board members. They are from the seven local associations in the state, with the number from each
local association based on size. The group is diverse with respect to what aspect of the apartment business they are
involved in or manage. This diversity results in expertise in development, acquisitions/dispositions, financing and the
various components of property operations.
•
There are officers, including Susan Passmore as Immediate Past President, myself as President, Mindy McCorkle as
Vice President, Jody Longwill as Secretary and Kellie Falk-Tillet as Treasurer.
•
Meetings are also attended by AANC/GCAA Executive Director Ken Szymanski, PTAA Executive Director Jon Lowder, and
TAA Executive Director Josie Eatmon, and also by our lobbyist, Colleen Kochanek.
•
On occasion we invite special speakers to attend, or are asked by organizations desiring to make us aware of their
issues if they can speak at a Board meeting. In an effort to effectively manage our time, as well as to avoid having an
avalanche of outside speaker request on topics that may be esoteric, we are rather selective in allowing outside entities
to speak at Board meetings.
•
We hold the Legislative Days event (see p. 1 for details) each May or June in Raleigh. This is a two-day affair in
downtown involving a host of activities, both serious (such as lobbying in the state legislature and listening to a variety
of speakers) and fun (cocktails, meals, drawings, fundraisers, groups getting together and heading out to nearby music
venues). The AANC is held in high regard by elected officials in NC – they listen when we meet with them, and Colleen
knows how to effectively reach them and get our messages carefully considered.
•
Much of our time and energy is spent either getting new legislation passed at the State level to the benefit of our
constituents, or in preventing adverse legislation from being enacted. While Colleen has other clients for whom she
works in the legislature, AANC is a very large part of her client portfolio.
•
The Board members are careful stewards of the AANC’s funds. The financials are reviewed in depth at each meeting,
and we are always attempting to control dues increases yet see to it that the organization is adequately funded, both in
the current year and in reserves for the proverbial “rainy day” event.
•
There are some standing committees of the Board, such as The Lease/Legal Handbook Committee and The Website
Committee. We also frequently form ad hoc committees, such as the Long-Range Planning Implementation Committee
to tackle issues that arise as the operating year unfolds. Your Board members have always been ready and willing to
chair and participate on these committees, and have continually produced excellent outcomes for the AANC and its
constituents.
The above bullets provide a snapshot of what your Board does. There are other items on each meeting agenda, but I hope this
gives our readers a glimpse into the fundamentals of how we operate for the benefit of our members.
For a complete list of current AANC Board Members and Officers, please see page six.
AANC NEWS Page 3
N.C. Supreme Court Ruling on Trash Disposal is
Huge and Historic Win for Apartment Industry
RALEIGH — The N.C. Supreme Court recently delivered a
“Thumbs-Up” to the apartment industry via its verdict in the
Cedar Greene, et al v. City of Charlotte case. The case centered
around the City of Charlotte and its dispute with Cedar Greene
Apartments over garbage collection. The apartment community
wanted to hire — at lower cost — a vendor other than the cityapproved company that provides trash collection services for
apartment communities in the city.
before the court of appeals. In its appeal, Charlotte contended
that O’Leary shouldn’t be allowed to challenge the city’s refusal
to reimburse the fees.
Charlotte’s refusal to reimburse the apartment community for
use of an outside vendor led to the lawsuit. A trial court favored
the apartment community and the outside vendor, but the N.C.
appeals court reversed much of the trial court’s ruling. A dissenting opinion at the appellate level subsequently led the case to
the N.C. Supreme Court.
“The law does not explicitly limit discrimination solely to customers, but instead provides guidelines that different rates must be
justified by a difference in the class of service,” Calabria wrote.
Charlotte had not done that.
The City of Charlotte contracts with Republic Services Inc. for
garbage collection at apartments, condominiums, and trailer
parks in the city. Each multifamily property qualifies for a set
number of collections per week based on the ratio of residential
units to dumpsters. If a property wants collections beyond the
number allowed by the city’s formula, it must contract with a
private waste hauler for additional pickups.
The Cedar Greene Apartments wanted to provide its residents
with additional pickups, and pursued a contract with O’Leary
Group Waste Systems for this service; O’Leary offered the apartment community a lower rate than Republic for extra collections.
O’Leary’s bid, however, contained an important condition: It was
contingent on receiving the same treatment as Republic at the
city’s garbage dump. Charlotte imposes a $27 per apartment
unit fee for garbage disposal, which covers both primary and
any supplemental collections. Per its agreement with the city,
Republic is reimbursed at the city dump for all collections from
apartments and condos within the city, including additional collections arranged with outside contractors.
The city refused to reimburse O’Leary for any additional collections it might perform at apartments in the city.
State law gives local governments a great deal of discretion to
operate public enterprises so long as they don’t discriminate or
act in an arbitrary manner. O’Leary and Cedar Greene went to
court, contending that Charlotte’s policies were discriminatory
and violated state law.
Superior Court Judge H. William Constangy ruled in favor of
the apartments and O’Leary. The city then brought the matter
Judge Ann Marie Calabria dissented from the majority holding at
the Court of Appeals, finding that O’Leary had standing to challenge the city’s policy. She found that the protections in state
law could extend to service providers.
“The City … has admitted that the solid waste disposal service
provided, whether by Republic, O’Leary, or another disposal service, is effectively the same,” Calabria wrote. “The identity of the
provider does not indicate a different class of service. However,
in refusing to pay any provider other than Republic, the city effectively subjects multifamily complexes to pay elevated rates
for their solid waste disposal.”
Court of Appeals rulings are binding interpretations of state
law unless overruled by the N.C. Supreme Court. Because of
Calabria’s dissent, the high court was required to hear an appeal if O’Leary sought it. The Supreme Court heard the appeal,
and sided with the reasons stated in Judge Calabria dissenting
opinion, thus reversing the decision of the court of appeals.
AANC Education
AANC and the City of Greenville co-sponsored a session of
“Fair Housing for Apartment Personnel” for GAPMA (Greenville Area Property Managers Association) members on
April 24th. AANC Executive Director Ken Szymanski led the
seminar and snapped the photo below, in which GAPMA
President Kimberly Quintard is at the center.
AANC NEWS Page 4
AANC Supports the following Bills in the NC General Assembly:
HB 522/SB 545:
Master Meters/
Landlord-Tenant Agreement;
Allow “All Inclusive” Leases
Some North Carolina rental housing consumers prefer to pay a single, agreed-upon
monthly fee to their housing providers for
both rent and utilities. Reps. Avila, Pittman,
Jeter and Speciale and Sen. Ronald Rabin
have filed H522/S545 to allow residents
and landlords the option of “all-inclusive”
lease agreements which are currently
prohibited in North Carolina. AANC is not
aware of any other state in our region with
this prohibition.
Good For Consumers - Leases with single,
agreed-upon monthly fees offer greater
simplicity and a predictable cost for consumers. In addition, all-inclusive leases
mean no hassle or expensive deposit to
establish a utility account, and no worries about timely utility payments or late
charges. These leases have been provided
in North Carolina for over 20 years and are
especially used by:
• Military Families - particularly con-
HB 773: Local Gov’t/Buildings/Structures/Inspections
Two years ago, the General Assembly recognized the need to protect rental
housing in North Carolina by addressing overreaching regulations implemented by cities and counties. Local governments, like property owners, are
naturally concerned about housing conditions. However, they have begun to
fight the blight in ways that impede private property rights and unfairly tax
rental housing without providing a public benefit.
We all want to help local governments fight neighborhood decline while ensuring minimal health, safety, and sanitation conditions are maintained in
residential structures. Unfortunately, some N.C. municipalities have evaded
the intent of previous legislation and are still singling out rental housing.
To correct the abuses, HB 773:
• Incorporates the requirement that units of government must have
reasonable cause to believe that unsafe housing conditions exist in
order to inspect private housing, via landlord history, reports, or actual
knowledge by a unit of government, thus allowing resources to focus
on unsafe conditions, problem properties, and irresponsible landlords.
• Provides local governments the authority to conduct inspections as part
of a targeted effort to arrest blight within designated geographic areas.
• Prohibits local government rental registration programs, permits, fees,
and Certificates of Occupancy as a condition of operating rental housing .
• Allows for voluntary rental registration programs so that local governments can locate property owners quickly in case of emergency and only
requires registration for those problem properties.
HB 802: Landlord/Tenant/Shorten Eviction Time
venient for short-term deployments
or transfers, and allows military
members to avoid costly connection
deposits.
Corporate Housing - a popular option for contract employees or top
executives as they transfer to a new
corporate location.
College/University Housing - allows
for a predictable monthly rate for
students & parents, allowing them to
establish budget more easily
In response to the age-old desire of many North Carolina rental housing
providers to realistically shorten the N.C. eviction (Summary Ejectment)
process, Representative Beverly Earle has introduced this bill. The other
sponsors of the bi-partisan bill are Representatives Tim Moore, Bill Brawley,
and Carla Cunningham. It is not uncommon for residential evictions to take 45
or more days in the urban counties of North Carolina; the apartment industry
has the strong conviction that the lengthy eviction process is anti-business,
ultimately hurts housing affordability for the preponderance of rental housing
consumers, and needs to be addressed legislatively.
Good for the Economy - Consumers ask
for all inclusive leases and this allows
landlords to meet this market demand.
There are at least three ways to shorten the N.C. eviction process; HB 802
addresses all three: (1) shorten the appeal period; (2) shorten the writ period;
(3) enforce the laws already on the books as to when court dates are set and
remove a magistrate’s ability to continue cases.
•
•
Good for Landlords - Single monthly fees
mean continuous, uninterrupted utility service and no disconnections for residents
for non-payment of utility bills.
Prior attempts by Landlord associations (including AANC) have failed in such
ventures. The reasons cited have included Due Process, Notice Requirements,
N.C. Administrative Office of the Courts under-funding, County Clerk
workloads, County Sheriff workloads, the political clout of Legal Services,
and others. This time may be different.
AANC NEWS Page 5
AANC Fends off
Generator Requirement
for Apartment Fire Safety
A North Carolina apartment developer
related to the AANC that some local units
of government are now requiring a dieselpowered generator as a back-up power
system for an apartment property fire
pump and is no longer accepting Duke
Power (local electricity provider) as a
“reliable power source” for the fire pump.
In most cases apartment developers have
to add fire pumps for automatic sprinkler
systems only because the local water utility
can’t supply adequate water pressure
(fire flow) to a site, attributable to system
characteristics, topography/elevation, and
building height.
Normally fire pumps are only required if
the city flow tests are inadequate to supply
the fire sprinkler demand. And that for
apartments 4 or 5 stories and/or with a
garage underneath (which is becoming
more and more the norm), if the public
water supply cannot support the hydraulic
calculations for the sprinkler system then
a small fire pump would be required. The
question is: is Duke Power a “reliable
power source”? If the answer is “no”, then
a diesel-powered generator needs to be in
place as a back-up – so goes the thinking.
This requirement derives from National
Electrical Code Article 695.3 requiring a
“reliable source of power”. NEC 695.3(B)
(2) also provides an exception for onsite
stand-by generators.
AANC became aware of a written position
about this matter by Richard Strickland,
Chief Fire Code Consultant of the NC
Department of Insurance – which aided
our argument.
Mr. Strickland’s written position references
Section 9.3.1 of NFPA20 (2007 edition),
specifically that if the fire department
apparatus can provide the “needed
pressures to supplement the sprinkler
system based on building height” an
emergency back-up generator is not
required.
Settlement on Student Housing Utility Squabble
On October 1, 2011, Senate Bill 533 - Session Law 2011-252 (“SB 533”) took effect. This legislation expressly authorizes lessors of certain types of multi-tenant residential
buildings, specifically those who lease individual bedrooms, to charge residents for
electricity, after approval by the Commission, and provides, that the “lessor may, at
the lessor’s option, pay any portion of any bill sent to a tenant.”
In discussions subsequent to the enactment of SB 533 it became
apparent that there was a miscommunication or misunderstanding
between the Public Staff of the North Carolina Utilities Commission
(“Public Staff”) and apartment owners/utility billing companies
(the “Industry”) regarding the application of SB 533 to the
“conservation cap” or utility allowance billing model, where a
landlord pays a portion of the tenant’s monthly electric bill, up
to a pre-set amount as provided in the lease, and the tenant
pays for any electric usage above the amount covered by the cap. The Industry asserts that the conservation cap billing model is
in use across the country. The Public Staff, along with Progress
Energy Carolinas, Duke Energy Carolinas, and the Attorney General
of North Carolina, believe that when conservation cap billing is
utilized (such as when the first $30 of electricity is paid for by the
landlord, and the tenant is billed for any electric usage exceeding
that amount), that the landlord should provide a refund to the
tenant when the tenant uses less electric service than covered by
the conservation cap. The Public Staff’s reason for advocating refunds
of the difference between the cap and “underage” (i.e., that portion of
the cap which the tenant did not consume in a given month) is its view
that tenants should pay not the landlord any more for electric service
than they would pay if billed directly by the electric power supplier. The
Industry does not share this view and believes that rent is a market
function and the $30 allowance is merely a benefit to the tenants
offered by the landlord as a participant in the rental housing market. The Industry also believes that if underage refunds were required, most
landlords would abandon the cap/allowance model in North Carolina
altogether, resulting in both landlords and tenants losing any benefits
of this billing arrangement to them.
On October 29, 2012, the Public Staff filed a Petition for Rule Clarification
(“Petition”) in NCUC Docket No. ER-100, Sub 1, requesting that the
NCUC clarify and revise Commission Rule R22 with respect to electric
resale to reflect the Public Staff’s position on this issue. Conservice,
Progress Energy Carolinas (“PEC”), Duke Energy Carolinas (“DEC”), and
the Apartment Association of North Carolina (“AANC”) filed comments
in response to that Petition. The matter is currently pending before the
NCUC.
In the interest of working together collaboratively, the Industry, the Public
Staff, and other interested parties have agreed to resolve their different
interpretations of SB 533 through a settlement of the issue raised by the
Public Staff in its Petition in Docket No. ER-100, Sub 1. The settlement also
resolves a complaint case brought by the Public Staff against a landlord,
resulting in a Commission order for refunds to tenants. AANC NEWS Page 6
Board of Directors
AANC’s Board of Directors is comprised of members from each of its
affiliated local apartment associations. These seven associations and
their respective AANC Board of Directors representatives are noted below.
Cumberland County Apartment Association
Carey Petricka
Kym Shoults
Greater Charlotte Apartment Association
Lisa Taylor
Timothy H. Hose - AANC President
Mindy McCorkle - AANC Vice President
Linda Caudle
Teresa Sandman
Greenville Area Property Managers Association
Kimberly Quintard
Piedmont Triad Apartment Association
Susan Passmore
Emily Goodman
Mary Gwyn
Jody Longwill - AANC Secretary
Peter Placentino
Triangle Apartment Association
Kellie Falk-Tillett - AANC Treasurer
Will Brownlee
Brenda Measamer
Meg Pisczek
Sherry Yarborough
The Apartment Association of Western North Carolina
Emily Kirchmeyer
Wilmington Apartment Association
Cindy Harrison
AANC Exeuctive Director
Ken Szymanski, AICP
AANC Lobbyist
Colleen Kochanek, Kochanek Law Group
AANC’s New Leadership Lyceum Program:
Promoting and Developing Leadership throughout North Carolina
Identifying, training and empowering emerging new leaders is a
primary responsibility of every successful organization. For the
Apartment Association of North Carolina (AANC), an investment
in leadership development via its new Lyceum Program is likely
to dramatically expand the inventory and enhance effective
performance of highly-motivated association leadership teams
going forward. The multifamily rental housing industry in North
Carolina is a dynamic and fast-growing business; fostering
leadership development will serve both the industry and its trade
association well.
The Curriculum for AANC’s Inaugural Lyceum Progam is:
I.
The ABCs of AANC and Association Management
August 14, 2013 in Greensboro
II.
Building Effective Public Advocacy Initiatives
November 2013 in Raleigh
III.
Developing Strong Association Leadership
February 2014 in Charlotte
IV. Participation in the 2014 AANC Legislative Days Program - May, 2014 in Raleigh
A Lyceum participant list will be available when finalized.
The Future of the AANC
What will the Apartment Association of North Carolina be like in
the years ahead? What are the diverse needs of our members?
How large will our urban apartment markets become? What will
be our legislative and regulatory challenges lying ahead? Will
there be an AANC state-wide conference/Trade Show? Will there
be full-time AANC staff?
These and other questions are being addressed head-on by
the AANC Long-Range Planning Implementation Committee,
chaired by AANC Immediate Past President Susan Passmore, and
consisting of former Presidents Mary Gwyn and Scott Wilkerson,
Ed Batchelor, Emily Goodman, and Linda Caudle. This is a highlymotivated, hands-on committee; they recently authored three
components of the Plan and submitted to the AANC Board, which
provided its approval:
•
•
•
Recommendations for an Annual AANC Board Retreat
Recommendations for Leadership Visits to Affiliates
A Multi-Tiered Communications Plan
The Committee will be continuing its work in the months ahead.
Remember to visit www.aanconline.org for all the latest
North Carolina apartment industry news!