15 West Kellogg Blvd.  
Saint Paul, MN 55102  
City of Saint Paul  
Meeting Minutes - Action Only  
Rent Stabilization Appeal Hearings  
Marcia Moermond, Legislative Hearing Officer  
Sonia Romero, Executive Assistant  
rentappeals@ci.stpaul.mn.us  
651-266-8568  
Thursday, April 13, 2023  
10:00 AM  
Room 330 City Hall & Court House  
10:00 a.m. Hearings  
Rent Stabilization Appeals  
1
RLH RSA 23-1  
Appeal of Jamele Watkins to a Rent Stabilization Determination at 400  
SELBY AVENUE, Apt. 312.  
Balenger  
Sponsors:  
Appellants: Corey Cole, Erika Mumm, Dr. Jamele Watkins  
Property Manager: Michelle Evenson, Reacor  
Staff: Lynne Ferkinhoff & Demetrius Sass, Department of Safety and Inspections  
(DSI)  
Moermond: This is  
a hearing to consider an appeal of a city determination on a  
request for an exemption of the City’s cap on rent increases. The goal of the hearing  
process is to come up with a recommendation for the City Council to consider on the  
appeals. This is a recommendation to the City Council, if for any reason someone  
objects to the recommendation I’ve made, the matter would be discussed by the  
Council and you can share your perspectives. If we hear from an of you who want to  
testify at Council, we want to make sure that the other parties are aware of that. We  
are trying to keep the communication open so all people can have their perspectives  
heard. What I first want to do in appeals cases is to hear from staff and get the  
background on what they looked at and why they came to the determination they did. I  
will ask them to also address some of the questions I have read in the appeals. This  
particular set of appeals came in since the rules change came into effect January 1,  
so this is new to us, too.  
Lynne Ferkinhoff: On January 30, 2023, the department received a self-certified  
application for an exception to the 3% rent increase cap per ordinance 193A. The  
application comprises the entire building of 91 units, including those of the appellants:  
Apartment 303 (Levi Indvik), Apartment 312 (Jamele Watkins), Apartment 327  
(Christine Hackney), and Apartment 332 (Erica Mumm). The intake form is part of the  
record and Michelle Evenson (landlord representing Selby Avenue Realty, LLC) and  
Victoria Koegel (agent representing Reacor, LTD) are listed as the applicants. Ms.  
Koegel and Ms. Evenson submitted the application on behalf of the owner, Selby  
Avenue Realty LLC and the responsible party, Ryan Companies. The applicants noted  
in the application that rent increases will vary based on where the current rent in  
comparison to the market, but not to exceed 8%. The increase was proposed to take  
effect on April 1, 2023. The reasons for the increase listed in the application included  
an increase in real property taxes and an unavoidable increase in operating expenses.  
There are no known code violations for this property. For self-certification, applicants  
are required to provide several pieces of information from the completed worksheet.  
These are used to calculate Maintenance of Net Operating Income or “MNOI”: Gross  
Scheduled Rental Income (GSRI): $1,868,620.46; Fair Net Annual Operating Income  
(NOI): $1,308,142.44; Fair NOI minus Current Year NOI: $213,420.52; Allowable Rent  
Increase Percentage: Not Provided Due to Incorrect Form Being Used.  
While the Allowable Rent Increase Percentage was not provided in the application due  
to the incorrect form being used, it can be calculated from the information given:  
Missed Fair Income ($213,421) divided by Current Year GSRI ($1,868,620) equals the  
Allowable Rent Increase of 11.42%.  
The applicants used an outdated version of the Maintenance of Net Operating Income  
form (likely the outdated version was what was on the city website given the timing of  
the application), so staff is not sure if the data provided for the current year is from  
2021 or 2022. Additionally, the outdated form is pre-populated with the Percent Annual  
Increase in Consumer Price Index (CPI) Base Year to Current Year for 2019 - 2021  
(6.05%). Since 2022 is the correct current year for this comparison, the Percent  
Annual Increase in CPI Base Year to Current Year for 2019 - 2022 is 13.95%, which  
would yield a larger increase than what was approved (16.64% vs 11.42%) assuming  
the current year data is 2022. Please note, however, that self-certified increases are  
capped at 8%. To calculate Percent Annual Increase in CPI Base Year to Current  
Year, the formula would be to take the Current Year Annual Average CPI and subtract  
the Base Year Average CPI and then divide by the Base Year Annual Average CPI.  
Per the self-certification process, the application was approved on February 7, 2023,  
for a maximum of an 8% increase. An approval letter was sent to the Property  
Representative for this request. The letter advised the Property Representative that  
rent cannot be increased in the next 45 days, pending a final determination.  
As required, the applicants provided a Rent Roll that included mailing information for  
91 units in the building. The Rent Roll was used to mail postcards to tenants. The  
February 1, 2023 postcard advised tenants that: 1) the landlord applied for an  
exception to the 3% cap on rent increases; 2) the application was being reviewed by  
City staff; 3) tenants needed to wait until a determination is issued before submitting  
documentation opposing the increase; 4) tenants have the right to appeal the  
determination to the City’s Legislative Hearing Officer. On February 7, 2023 a second  
postcard advised tenants that: 1) the landlord applied for an exception to the 3% cap  
on rent increases; 2) approval was granted for the exception through the  
self-certification process; 3) the determination was not final, and rent cannot be  
increased in the next 45 days.  
Moermond: To recap, some of the high points here. We have an application made in  
January and a notification that follows letting tenants know an application has been  
made for an exception to the rent cap. Then DSI comes up with its decision, which in  
this case an automatic certification because it is in the 3 to 8% range. Then  
notification that a determination was made goes out to tenants. When our office got  
the tenant appeal, we asked the ownership to share the MNOI supporting the  
application. There was some confusion, my office, in getting out the right documents.  
Hopefully everybody has the right information. If people haven't had enough time to  
review it and have additional questions, we can certainly figure out a way to give people  
a chance to metabolize that information. What I heard from the staff review of the  
MNOI was that it was filled out using a base year of 2019 but the current year listed  
here as 2021 and it should have been 2022, perhaps that was because an old  
worksheet was used. Because that happened, the allowable rent increase was in the  
11% range.  
Ferkinhoff: 11.42%  
Moermond: and if the numbers were adjusted to look at 2022 data, the number would  
have been 13.95%?  
Sass: 13.95% would have been the CPI value comparing 2019 to 2022, just changing  
that 6% to 13.95%, by including a small math error I found brings the allowable  
increase to 17.95%. It is still well above the 8% cap for self-certification.  
Moermond: Had it been filled out for an increase in excess of 8% your analysis would  
have been looking at the information submitted which maybe for the wrong year and  
you if it were, you would engage in a back-and-forth conversation with the applicant to  
figure out whether or not on the data was correct. But and based on what we're looking  
at, it would be 11.4% and using the current CPI information that would bring it to  
17.5%. So that is the range that would be allowable if the application would have been  
gone through.  
Ms. Evenson, one thing that struck me, and I don't know if I would have noticed it had  
property tax information not been brought up and the appeals, was what was going on  
with the property taxes. And I did see proposed property tax statements as  
attachments on an appeal. So, I asked the DSI team about looking back at the (final)  
property tax statements for that time, as opposed to the proposed one. Looking at  
that, one thing that was noticeable was that the property tax numbers in the MNOI  
likely reflected the fact that this is a mixed use building, and the MNOI only included  
the residential proportion of the property taxes. When I talked to Mr. Sass about this,  
he determined the proportion of the total property tax bill showing up on the MNOI was  
hovering in the 59 to 61% range.  
Evenson: There's actually 7 parcels associated with this building. We use different  
percentages based on the parcel to calculate what the apartments pays and what the  
commercial space pay. These percentages have been established for many, many  
years. Well prior to my time. I just went off over the apartment building’s financials  
used in the past, since they took ownership in 2017. I broke out the percentages by  
parcel if you need that information.  
Moermond: I think that’s going to introduce a lot more complexity than what we need to  
look at here. This the property tax statement so shows the bill of $516,214. But the  
amount of property taxes listed in your work sheet is $318,641. So that is about 59%  
of that total bill, that you have included here for consideration in your rent increase.  
And then it looks like in 2021, of the $604,282 property tax statement, you are listing  
$360,687, or 61% of that total.  
Evenson: Honestly, I questioned that myself. I downloaded the worksheet from the  
website the week that I completed, and it did say 2021. So, I did complete it using  
2021 numbers.  
Moermond: Right. There was so much transition with implementing the new version of  
the Rent Stabilization ordinance that was a misstep on the City’s part. I don't know that  
we're going to have you need to complete a 2022 version given that the 2021 numbers  
work to give you the rent increase you’re looking for and Mr. Sass reported that if the  
2022 CPI was used, your rent increase could have been significantly higher. Do staff  
have any questions at this point?  
Ferkinhoff: That answered my question of 2021 versus 2022.  
Moermond: Ms. Evenson, do you have questions?  
Evenson: No, I don't. And I guess I just wanted to express that, you know, and we  
knew that we qualified technically for more based on the numbers, but in our own  
wellbeing we didn’t feel like it was right to give our residents that high increases, that's  
why we decided to just go with 8%. So, you know, we are also considering that in our  
steps here as well.  
Moermond: Would you have said between 0 and 8, are the ones that aren't receiving at  
least 3?  
Evenson: Correct, yes. There's a wide range, some that we will not even be 3%. It all  
the determined by where their current rent is compared to what our market rents are.  
And we've also done extensive capital improvements, even in 2022. I believe each unit  
that's appealing has at least received a new furnace, if not a new furnace, new AC and  
water heater. I believe there's one unit that received all 3. So, we're investing money  
back into the property to make it a good place to live. And we need to be able to  
maintain a reasonable, return.  
Moermond: Your application indicated you would begin implementing these rent  
increases in April. Obviously, that is stayed while we have this conversation, then  
people would be receiving increases throughout the course of the next 12 months,  
based on their lease cycle and your specific increase for the unit they occupy.  
Mr. Sass, Ms. Ferkinhoff, when there are capital improvements made to individual  
units that result in variation in the rent increases being charged to them, do you ask  
for a breakdown by unit for the improvements?  
Sass: If capital improvements were listed in the application, which there weren’t, then  
building capital improvements are applied to everybody, individual unit capital  
improvements would be proportioned out to those units.  
Moermond: And does that make a difference based on the amount of capital  
improvements being referenced?  
Sass: In the value? I would say yes, it is typical for especially larger up complexes.  
Something like a faucet might not be a capital improvement to the same extent that a  
new faucet for a single-family home could fall in that dollar value range for a capital  
improvement. Bigger complexes tend to have regular maintenance than single-family  
homes. Sometimes their capital improvements get lumped in with their regular repairs  
and maintenance. So, unless there was something like a multithpousand dollar  
expense, it is likely that larger buildings don't separate that out.  
Evenson: To clarify, the information that I submitted did not include capital expenses.  
Those expenses go above and beyond the figures that we provided. Right or wrong, I  
don't know. But I felt like I completed it, I knew I exceeded it.  
Moermond: I just wanted to clarify it for the record, because you mentioned some units  
had a new AC and some did not. If that was a piece of why Unit A vs unit B received  
an 8% vs a 4%. And you’re right, what I am hearing here is that you can go to an 8%  
based on the numbers you provided.  
The first appeal on my agenda is Ms. Watkin’s appeal. Although you are all here and  
you don’t have to speak in agenda order.  
Erica Mumm: The Blair is requesting an exception to the Rent Stabilization ordinance.  
For the years 2020, 2019 and 2021, they show a disproportionate increase in operating  
costs compared to their reported income. The Blair reported that their operating  
expenses were approximately $586,000 in 2019, the base year and approximately  
$774,000 in 2021. What we are using is the current year. So, this is an increase in  
operating costs of 32% in 2 years with such a drastic increase in operating costs. It  
does raise the concern that the base year had exceptionally low expenses, and that is  
not representative. In addition, there are entries in the spreadsheet that are suspect.  
The Blair reported a 34% increase in the cost of insurance from 2019 and 2021, while  
at the same time claiming that they had $35,500 uninsured damages from 2021 when  
they did not report any uninsured damages in 2019. The Blair did not report any  
spending on office supplies or security in 2019 but they reported spending several  
thousand dollars in these areas for 2021. They also reported a 58% increase in  
spending on management services and reported spending almost 3 and a half times  
the amount of money on accounting in 2021 than they did in 2019. These expense  
increases have not resulted in the expansion of new tenant services nor the  
improvement of existing services. This makes it hard to argue that these expenses are  
fair and reasonable.  
Moermond: So, you are looking for direct tenant benefit resulting from those increases  
in expenses.  
Mumm: Yes, given that 32% increase in reported operating costs from 2019 to 2021  
and the fact that their expenses category reported in 2021 that were not reported in any  
other year, it seems more than prudent to request a breakdown of The Blair’s operating  
expenses and other recent years, not just 2019, and 2021. Further, it also seems  
prudent to request documentation of this breakdown for each reference here, as it is to  
provide evidence of their unusually high increase in operating expenses before granting  
their request for an exception to the rent stabilization ordinance. Finally, while property  
taxes did increase from 2019 to 2021, they are estimated to decrease in 2023. The  
Blair estimated 2023 taxes were not a part of the information required to turn in their  
application. It is nonetheless relevant. Taxes is the foundational pillar of their rent  
stabilization ordinance exemption. This also provides a contrast between the situation  
of landlords and tenants. In this case, the landlords’ taxes are expected to decrease in  
the coming year. However, the rent to tenants isn't set, always slated to increase. This  
is the very situation that the people of Saint Paul voted to prevent, and yet their desires  
have been easily sidestepped.  
Cole: Beyond the facts of this case, it must also be said that the current  
implementation of the rent stabilization ordinance is disappointing from a tenant  
standpoint. While it is true, obviously, that tenants have the right to appeal their  
landlord’s exemption request in any determinations made thereof, the process is laden  
with barriers, information asymmetry and vulnerability to retaliation. I personally haven’t  
gone through this process. I had to pay a fee, take the morning off of work and  
schedule a City hearing just to see the basis of which my landlord has requested to  
raise my rent beyond the 3% limit and just to see how high they intended to raise it. It  
is easy to say that this policy is not written with tenants in mind and arguably it isn't  
even written with Saint Paul residents in mind. The ordinance privileges the interests of  
corporate landlord, some of whom are based far outside of city limits over the human  
rights of my neighbors and I, some of whom have been living in and contributing to  
work in Saint Paul for decades, long before the company that now seeks to raise our  
rents, came into possession of the building there. Even now, as my neighbors and I  
exercise our legal right to do an appeal to this decision, not because of, but despite  
the City's process, we are very worried. We're worried that the determination that was  
made, very quickly, behind closed doors without any transparency to us, will be upheld  
just on the basis how it was made. We're worried that the extraordinary promptness, in  
lack of verification involved in the exemption, the process will be used, paradoxically  
as a basis to deny our appeal to that very determination. And we are worried that many  
of the citizens of Saint Paul will soon be priced out of the place that they once called  
home. I love living in Saint Paul and I would stay here for decades and decades if I  
could. But I can't afford to live here, if the rent each year is going to rise several times  
the rate of my wages, despite the nominal presence of rent stabilization in the city.  
Watkins: Saint Paul Rent Stabilization began as a grassroots effort and was approved  
by Saint Paul voters. I was really confused when I received a postcard in the mail  
saying that the rent can be raised anywhere between 3% and 8%. I was horrified to  
learn about the self-certification process. It was very easy on the website and this lack  
of transparency. As a university employee, raises are out of my control. I don't even  
know if I'll get a raise this year, and if I do it won’t be 8%. I'm lucky it will be 3%. In  
fact, I don't know anyone who receives annual raises that high. Simply the  
expectations that tenants receive 8% raises year after year is not sustainable. And  
Saint Paul needs to think about that going forward. The City Council amendments  
makes me wonder if the members are acting on the interest of the citizens of Saint  
Paul or those of corporations? I feel powerless and scared and be priced out of where I  
live as someone with a very secure job. How are we supposed to have faith in our local  
government with amendments like these, amendments that go against what the  
residents of Saint Paul voted for.  
Moermond: I have noted, you are Dr. Watkins, not Ms Watkins. It wasn't on the  
application. I will correct that. Okay, so we start out with an analysis of the accounting,  
and the underlying argument is that the accounting would provide increases in rent  
should translate tenant services and things experience directly by tenants. And if not,  
then it's not a justifiable expense. I just want to kind of dive a little bit more deeply into  
the logic of that.  
Mumm: I think that the main concern is that they are reporting extremely high  
increases of 30% to 50% in some of these categories. And well, you know, there  
hasn't been an improvement in tent experience. I think more of our concern is it's kind  
of a lack of oversight in, you know, these are self-reported numbers. There are many  
categories where they didn't report any on office supplies, any spending on security,  
any spending on insured damage. In 2019, they reported tens of thousands of dollars  
in those categories combined in 2021. And so that combined with the categories that  
show the us in a 30% to 50% increases. I guess I question if 2019 and 2021 are an  
accurate representation of their increase in expenses.  
Cole: We are aware that the ordinance, as amended, makes no distinction between  
reasonable and unreasonable expenses. It does not necessarily remove us from the  
woods, described by Ms. Mumm that 2019 may have been miraculously low expense  
year where we didn't need office supplies or security. But on top of that, you know, it  
just needs to be remarked that we have no control over the administrative costs  
incurred by our landlord, and we should not have to shoulder the burden, especially  
administrative costs. We have no idea if there are reasonable, what they even break  
down to. That didn’t lead to efficiencies in other areas of expenses. The more spending  
and management did not lead to less spending in accounting, and it did not lead to  
less spending on insurance. There's no efficiency gained. there's no quality-of-life  
gained for the tenants. That should be reflected in the determination process. Going  
forward, it may not be reflected in the determination for this case. It needs to be  
remarked that not all expenses are necessarily reasonable.  
Moermond: If you can just give me a moment. I'm going to pause the record. I just  
want for my benefit if I can put my fingers quickly on the ballot initiative language. And  
if I can’t, I will definitely include on the follow-up information. The question seems to  
hinge on the change, or the changes, in the language that might change the meaning  
that was intended. Which it's hard to say with two sentences, but from that to the  
originally adopted ordinance based on that. Then there was an amendment that added  
definitions into it. Some, I would say, very modest additions to make it  
comprehensible. There was a pretty extensive set of amendments that were adopted in  
September of last year. Throughout that amendment process, I'm hearing that you  
believe that it got further and further away from what you understood the intent of the  
ballot initiative was. I want to fact check that the 7 reasons for justification of rent  
increase have remained unchanged. Staff, has your way of evaluating them changed  
from the information that you received? Have you gotten more specific about some  
things that you weren't a specific about before the September 1st amendments? I'm  
thinking one way to answer this would be the DSI administrative rules that were in  
place for reviewing applications received up to December 31st of last year and the DSI  
administrative rules for applications received from January 1st moving forward. Did  
those rules change, in a substantive way, for how you interpret those 7 reasons that  
would be the justification for reasonable increase in rent?  
Sass: I would say no. The rules went through the public comment period. I would say  
the way that the applications are reviewed, hasn't changed substantially, they haven't  
really changed much since the amendments. Aside from the addition of the new  
processes which exist because of the amendments. There are also administrative  
changes on how we would review things like an increase in property taxes, just a  
numerical value.  
Moermond: The changes that have introduced new administrative procedures are more  
around the things like just cause vacancy?  
Sass: Correct.  
Moermond: Okay. And that that is you just building out something new to be able to  
interpret those situations when they come forward from property managers, landlords’  
owners.  
Sass: The amendments added several new processes that DSI needs to manage and  
facilitate. But the actual MNOI process is mostly similar to how it was previously.  
Ferkinhoff: The evaluation of the numbers, how we would look at them, that hasn't  
changed. But in the sense of the self-certified application, what may be different is  
more administrative. For example, prior to January 1st, we didn't have to send  
notifications to tenants to let them know that a landlord had requested a rent increase  
that was above the cap, now we do. That’s an additional procedure, which is more  
procedural, more administrative, than anything which would impact the actual numbers  
that we would get an application.  
Moermond: I do appreciate that; it is not a small lift. I would say medium lift to file an  
appeal and come and talk about it. I know out of the 91 units we have 4 units  
represented. There is a $25 appeal fee that has not change since the 1990's. Please  
not, if you were in any way represented by SMIRLS or another such entity, I waive that  
fee. Just so you have that for your background. With respect to taking time off of  
work, to have this kind of conversation we haven't figured out another way to do it  
better, to tell you the truth. There's emailing information back and forth, which is  
helpful, but it doesn't give us the same kind of benefit is a face-to-face conversation  
when we can loop back in the owner and staff and have this kind of be all of us in the  
same space. Thank you for investing in that. I think that hearing your voices is really  
important and creating a record that articulates your reasoning connected to your  
specific circumstances for this appeal. This is how the Council looks at changes in the  
future, so I appreciate that. I also appreciate that you did take time out of your day.  
There were hardly any comments received on the rules when DSI asked for public  
comment on the changes that went into place on January 1st.  
Ferkinhoff: That that's correct. I want to say that there were a dozen entities, and or  
individuals who submitted public comments.  
Moermond: in comparison to the rules that you put out there in April of 2021 for the  
original implementation of the ordinance?  
Ferkinhoff: Neither Demetrius nor I was employed at that time by the City. But it's in  
the hundreds.  
Moermond: Director Wiese was here and did testify that there were hundreds of  
comments. There was really a drop-off in the public participation component and  
hearing about what that might look like. It could be just because there is a greater  
level of specificity and questions were being answered. You know, agree or disagree, I  
don't know. Again, hearing your voices in the context of not having as much public  
comment at that point, I want to just thank you for doing that. I'm going to look at this  
a little bit more deeply. I am bound by the ordinance language which, you all are aware  
of and that that would be my job. Do any of you have any questions? What I'm thinking  
for myself is that I'm going to review this information, maybe ask some follow-up  
questions. Any additional information that I received from you all, from the property  
managers, I would make sure to share back and forth so that we all again continue to  
operate on the same information and background.  
Moermond: I will reread the ordinance on this point, but I’m not clear that tenants have  
the ability to request “an audit” of an application. Do property owners have an obligation  
to produce that information because tenants are asking for it? Does the City handle  
that and figure out if there's additional questions that they would ask, based on tenant  
commentary? How does the city evaluate when to do that? Can tenants say they don't  
think 2019 was a good year for comparative purposes, I think you should provide us  
with 2020 data? When I have seen base year questions brought up, it has been in the  
context of exceptionally low rents having been collected in the base year or a lack of  
knowledge of what the rents were because there's been a transfer and property  
ownership and the books that were used in 2019 simply are not available to someone  
who acquired in 2020. So those are the 2 circumstances. I can think that's clear.  
Cole: Yeah, do think that is concerning that tenants can’t raise that, while the landlords  
are able to. I want to reiterate that the point that these are all self-reported expenses  
and at 32% increase in operating expenses in 2 years is extremely high. I just want to  
reiterate the concern that there is no oversight on these numbers that they are  
reporting. Again, there is some categories that we didn't report in 2019, that they're  
spending a lot of money and in 2021. And I think that then using those numbers as a  
basis for increasing our rents when there hasn't been any oversight in that process.  
Moermond: What I need to do is look at the math on that. You're in the 30% range for  
some of the items listed as expenses in the MNOI. I think I need to look at whether or  
not what's been produced without audit gets us to 8%, which was the maximum  
request made and whether or not an audit is justified to go even more deeply based on  
the comments that you are raising. In the past when I have done these, it usually  
takes me 2 or 3 weeks to come up with a letter to go out with my recommendation to  
the City Council. And as I indicated right out of the gates, this is a recommendation  
that I'm making. At the very worst, what we've done here today is to create a record.  
We've gotten the documents and comments on the record, the staff report and  
landlords’ information. It's all at least pulled together in one place so that the  
decision-makers have that information coming as their starting point. Again, I  
appreciate you coming in and engaging and this. I'm going to, if you do have more  
questions.  
Mumm: I have a question. During this period where you are looking deeper, making  
the recommendation, can our rents be raised during that period?  
Moermond: No. Any potential rent increase is stayed until a decision is made by the  
City Council, which is the final determination. Then state law requirements with respect  
to notification and so on to apply. A final determination on the application happens 45  
days to pass from the DSI determination being made, unless there is an appeal within  
those 45 days. Yes, Doctor Watkins  
Watkins: I want to emphasize that we’re spending this time we've met together. We're  
thinking of all these things because we really do enjoy living where we live, like we love  
living where we where we live. We all make a certain amount of money. And again, the  
raises are some things. We're doing this because we are really invested and the place  
that we live, and we want to stay where we live. And we’re just trying to see how we can  
do that. You know, with what we have in our bank account, you know, so that's what  
the bottom line is.  
Moermond: Yes, and I will say the financial and emotional investment that is being  
made by you and the residents there is what makes that area so vibrant.  
Cole: I want the record to reflect that the raises above 8% and raises between 3% and  
8% - that dichotomy is largely artificial from our tenant perspective. It's a 6% to 8%  
raise and a 17.5% raise. Well, although those are vastly different numbers, they both  
spell displacements for us. And so, I just want that to be on everyone's mind when  
they're deciding this case that it is not a magnanimity to spare us from the 17.5% in  
rent increase. If we are just going to get hit with a 6% or 8% increase. That is  
structural differentiation. That is codified into law. But structurally meaningless for us  
as living Saint Paul residents.  
Moermond: I am going to push back a little bit and definitions that we are using here.  
The ordinance talks about up to 3% being allowable without having to seek an  
exception. And then the difference between the 3% and up is one up procedure at the  
City, where 3% to 8% is mechanistically decided and then 8% plus is decided using a  
more thorough staff analysis. We now have the more thorough staff analysis on this  
3% to 8% requested increase and are going through the numbers. I hear your  
arguments about the issues of transparency between the 3% and 8% and how that  
gets turned around. And I know that the City administration talks about just the  
amount of staff that would take, a fleet of people that it would take to be able to do  
this. I think that the deal is that we wouldn't be here if it weren't an excess of 3%. That  
is a number that was selected when 3% was the average rent increase. But your point  
about the transparency is super. You know, I hear you. I have to go back and ask for  
these worksheets to be produced. They don't exist in city records. I can't pluck it off  
the shelf and neither can you. Now we can use that and do the analysis and produce  
that.  
Watkins: I think to the comment was about it doesn't matter if it's 8% or it could have  
been 11% or 13%. We cannot live there like we are being displaced. So that's just  
something to for. I think, if I may, I don't want to speak for you, but I think that is a  
large part of what you just said was that it doesn't matter if it's 11% or 13% or 8% we  
are out, you know….  
Moermond: Thank you. I really do appreciate what you said today. It's been very  
thought provoking and helpful. Okay, Ms. Evenson, if you do have comments, I want to  
welcome them right now. Is there anything that you wanted to say before we wrap up?  
We talked earlier any additional information at this point.  
Evenson: No, I don't have any.  
Moermond: Thank you, everyone for your time today.  
Deny the appeal.  
2
RLH RSA 23-2  
Appeal of Christine Hackney to a Rent Stabilization Determination at 400  
SELBY AVENUE, Apt 327.  
Balenger  
Sponsors:  
Appellants: Corey Cole, Erika Mumm, Dr. Jamele Watkins  
Property Manager: Michelle Evenson, Reacor  
Staff: Lynne Ferkinhoff & Demetrius Sass, Department of Safety and Inspections  
(DSI)  
Moermond: This is  
a hearing to consider an appeal of a city determination on a  
request for an exemption of the City’s cap on rent increases. The goal of the hearing  
process is to come up with a recommendation for the City Council to consider on the  
appeals. This is a recommendation to the City Council, if for any reason someone  
objects to the recommendation I’ve made, the matter would be discussed by the  
Council and you can share your perspectives. If we hear from an of you who want to  
testify at Council, we want to make sure that the other parties are aware of that. We  
are trying to keep the communication open so all people can have their perspectives  
heard. What I first want to do in appeals cases is to hear from staff and get the  
background on what they looked at and why they came to the determination they did. I  
will ask them to also address some of the questions I have read in the appeals. This  
particular set of appeals came in since the rules change came into effect January 1,  
so this is new to us, too.  
Lynne Ferkinhoff: On January 30, 2023, the department received a self-certified  
application for an exception to the 3% rent increase cap per ordinance 193A. The  
application comprises the entire building of 91 units, including those of the appellants:  
Apartment 303 (Levi Indvik), Apartment 312 (Jamele Watkins), Apartment 327  
(Christine Hackney), and Apartment 332 (Erica Mumm). The intake form is part of the  
record and Michelle Evenson (landlord representing Selby Avenue Realty, LLC) and  
Victoria Koegel (agent representing Reacor, LTD) are listed as the applicants. Ms.  
Koegel and Ms. Evenson submitted the application on behalf of the owner, Selby  
Avenue Realty LLC and the responsible party, Ryan Companies. The applicants noted  
in the application that rent increases will vary based on where the current rent in  
comparison to the market, but not to exceed 8%. The increase was proposed to take  
effect on April 1, 2023. The reasons for the increase listed in the application included  
an increase in real property taxes and an unavoidable increase in operating expenses.  
There are no known code violations for this property. For self-certification, applicants  
are required to provide several pieces of information from the completed worksheet.  
These are used to calculate Maintenance of Net Operating Income or “MNOI”: Gross  
Scheduled Rental Income (GSRI): $1,868,620.46; Fair Net Annual Operating Income  
(NOI): $1,308,142.44; Fair NOI minus Current Year NOI: $213,420.52; Allowable Rent  
Increase Percentage: Not Provided Due to Incorrect Form Being Used.  
While the Allowable Rent Increase Percentage was not provided in the application due  
to the incorrect form being used, it can be calculated from the information given:  
Missed Fair Income ($213,421) divided by Current Year GSRI ($1,868,620) equals the  
Allowable Rent Increase of 11.42%.  
The applicants used an outdated version of the Maintenance of Net Operating Income  
form (likely the outdated version was what was on the city website given the timing of  
the application), so staff is not sure if the data provided for the current year is from  
2021 or 2022. Additionally, the outdated form is pre-populated with the Percent Annual  
Increase in Consumer Price Index (CPI) Base Year to Current Year for 2019 - 2021  
(6.05%). Since 2022 is the correct current year for this comparison, the Percent  
Annual Increase in CPI Base Year to Current Year for 2019 - 2022 is 13.95%, which  
would yield a larger increase than what was approved (16.64% vs 11.42%) assuming  
the current year data is 2022. Please note, however, that self-certified increases are  
capped at 8%. To calculate Percent Annual Increase in CPI Base Year to Current  
Year, the formula would be to take the Current Year Annual Average CPI and subtract  
the Base Year Average CPI and then divide by the Base Year Annual Average CPI.  
Per the self-certification process, the application was approved on February 7, 2023,  
for a maximum of an 8% increase. An approval letter was sent to the Property  
Representative for this request. The letter advised the Property Representative that  
rent cannot be increased in the next 45 days, pending a final determination.  
As required, the applicants provided a Rent Roll that included mailing information for  
91 units in the building. The Rent Roll was used to mail postcards to tenants. The  
February 1, 2023 postcard advised tenants that: 1) the landlord applied for an  
exception to the 3% cap on rent increases; 2) the application was being reviewed by  
City staff; 3) tenants needed to wait until a determination is issued before submitting  
documentation opposing the increase; 4) tenants have the right to appeal the  
determination to the City’s Legislative Hearing Officer. On February 7, 2023 a second  
postcard advised tenants that: 1) the landlord applied for an exception to the 3% cap  
on rent increases; 2) approval was granted for the exception through the  
self-certification process; 3) the determination was not final, and rent cannot be  
increased in the next 45 days.  
Moermond: To recap, some of the high points here. We have an application made in  
January and a notification that follows letting tenants know an application has been  
made for an exception to the rent cap. Then DSI comes up with its decision, which in  
this case an automatic certification because it is in the 3 to 8% range. Then  
notification that a determination was made goes out to tenants. When our office got  
the tenant appeal, we asked the ownership to share the MNOI supporting the  
application. There was some confusion, my office, in getting out the right documents.  
Hopefully everybody has the right information. If people haven't had enough time to  
review it and have additional questions, we can certainly figure out a way to give people  
a chance to metabolize that information. What I heard from the staff review of the  
MNOI was that it was filled out using a base year of 2019 but the current year listed  
here as 2021 and it should have been 2022, perhaps that was because an old  
worksheet was used. Because that happened, the allowable rent increase was in the  
11% range.  
Ferkinhoff: 11.42%  
Moermond: and if the numbers were adjusted to look at 2022 data, the number would  
have been 13.95%?  
Sass: 13.95% would have been the CPI value comparing 2019 to 2022, just changing  
that 6% to 13.95%, by including a small math error I found brings the allowable  
increase to 17.95%. It is still well above the 8% cap for self-certification.  
Moermond: Had it been filled out for an increase in excess of 8% your analysis would  
have been looking at the information submitted which maybe for the wrong year and  
you if it were, you would engage in a back-and-forth conversation with the applicant to  
figure out whether or not on the data was correct. But and based on what we're looking  
at, it would be 11.4% and using the current CPI information that would bring it to  
17.5%. So that is the range that would be allowable if the application would have been  
gone through.  
Ms. Evenson, one thing that struck me, and I don't know if I would have noticed it had  
property tax information not been brought up and the appeals, was what was going on  
with the property taxes. And I did see proposed property tax statements as  
attachments on an appeal. So, I asked the DSI team about looking back at the (final)  
property tax statements for that time, as opposed to the proposed one. Looking at  
that, one thing that was noticeable was that the property tax numbers in the MNOI  
likely reflected the fact that this is a mixed use building, and the MNOI only included  
the residential proportion of the property taxes. When I talked to Mr. Sass about this,  
he determined the proportion of the total property tax bill showing up on the MNOI was  
hovering in the 59 to 61% range.  
Evenson: There's actually 7 parcels associated with this building. We use different  
percentages based on the parcel to calculate what the apartments pays and what the  
commercial space pay. These percentages have been established for many, many  
years. Well prior to my time. I just went off over the apartment building’s financials  
used in the past, since they took ownership in 2017. I broke out the percentages by  
parcel if you need that information.  
Moermond: I think that’s going to introduce a lot more complexity than what we need to  
look at here. This the property tax statement so shows the bill of $516,214. But the  
amount of property taxes listed in your work sheet is $318,641. So that is about 59%  
of that total bill, that you have included here for consideration in your rent increase.  
And then it looks like in 2021, of the $604,282 property tax statement, you are listing  
$360,687, or 61% of that total.  
Evenson: Honestly, I questioned that myself. I downloaded the worksheet from the  
website the week that I completed, and it did say 2021. So, I did complete it using  
2021 numbers.  
Moermond: Right. There was so much transition with implementing the new version of  
the Rent Stabilization ordinance that was a misstep on the City’s part. I don't know that  
we're going to have you need to complete a 2022 version given that the 2021 numbers  
work to give you the rent increase you’re looking for and Mr. Sass reported that if the  
2022 CPI was used, your rent increase could have been significantly higher. Do staff  
have any questions at this point?  
Ferkinhoff: That answered my question of 2021 versus 2022.  
Moermond: Ms. Evenson, do you have questions?  
Evenson: No, I don't. And I guess I just wanted to express that, you know, and we  
knew that we qualified technically for more based on the numbers, but in our own  
wellbeing we didn’t feel like it was right to give our residents that high increases, that's  
why we decided to just go with 8%. So, you know, we are also considering that in our  
steps here as well.  
Moermond: Would you have said between 0 and 8, are the ones that aren't receiving at  
least 3?  
Evenson: Correct, yes. There's a wide range, some that we will not even be 3%. It all  
the determined by where their current rent is compared to what our market rents are.  
And we've also done extensive capital improvements, even in 2022. I believe each unit  
that's appealing has at least received a new furnace, if not a new furnace, new AC and  
water heater. I believe there's one unit that received all 3. So, we're investing money  
back into the property to make it a good place to live. And we need to be able to  
maintain a reasonable, return.  
Moermond: Your application indicated you would begin implementing these rent  
increases in April. Obviously, that is stayed while we have this conversation, then  
people would be receiving increases throughout the course of the next 12 months,  
based on their lease cycle and your specific increase for the unit they occupy.  
Mr. Sass, Ms. Ferkinhoff, when there are capital improvements made to individual  
units that result in variation in the rent increases being charged to them, do you ask  
for a breakdown by unit for the improvements?  
Sass: If capital improvements were listed in the application, which there weren’t, then  
building capital improvements are applied to everybody, individual unit capital  
improvements would be proportioned out to those units.  
Moermond: And does that make a difference based on the amount of capital  
improvements being referenced?  
Sass: In the value? I would say yes, it is typical for especially larger up complexes.  
Something like a faucet might not be a capital improvement to the same extent that a  
new faucet for a single-family home could fall in that dollar value range for a capital  
improvement. Bigger complexes tend to have regular maintenance than single-family  
homes. Sometimes their capital improvements get lumped in with their regular repairs  
and maintenance. So, unless there was something like a multithpousand dollar  
expense, it is likely that larger buildings don't separate that out.  
Evenson: To clarify, the information that I submitted did not include capital expenses.  
Those expenses go above and beyond the figures that we provided. Right or wrong, I  
don't know. But I felt like I completed it, I knew I exceeded it.  
Moermond: I just wanted to clarify it for the record, because you mentioned some units  
had a new AC and some did not. If that was a piece of why Unit A vs unit B received  
an 8% vs a 4%. And you’re right, what I am hearing here is that you can go to an 8%  
based on the numbers you provided.  
The first appeal on my agenda is Ms. Watkin’s appeal. Although you are all here and  
you don’t have to speak in agenda order.  
Erica Mumm: The Blair is requesting an exception to the Rent Stabilization ordinance.  
For the years 2020, 2019 and 2021, they show a disproportionate increase in operating  
costs compared to their reported income. The Blair reported that their operating  
expenses were approximately $586,000 in 2019, the base year and approximately  
$774,000 in 2021. What we are using is the current year. So, this is an increase in  
operating costs of 32% in 2 years with such a drastic increase in operating costs. It  
does raise the concern that the base year had exceptionally low expenses, and that is  
not representative. In addition, there are entries in the spreadsheet that are suspect.  
The Blair reported a 34% increase in the cost of insurance from 2019 and 2021, while  
at the same time claiming that they had $35,500 uninsured damages from 2021 when  
they did not report any uninsured damages in 2019. The Blair did not report any  
spending on office supplies or security in 2019 but they reported spending several  
thousand dollars in these areas for 2021. They also reported a 58% increase in  
spending on management services and reported spending almost 3 and a half times  
the amount of money on accounting in 2021 than they did in 2019. These expense  
increases have not resulted in the expansion of new tenant services nor the  
improvement of existing services. This makes it hard to argue that these expenses are  
fair and reasonable.  
Moermond: So, you are looking for direct tenant benefit resulting from those increases  
in expenses.  
Mumm: Yes, given that 32% increase in reported operating costs from 2019 to 2021  
and the fact that their expenses category reported in 2021 that were not reported in any  
other year, it seems more than prudent to request a breakdown of The Blair’s operating  
expenses and other recent years, not just 2019, and 2021. Further, it also seems  
prudent to request documentation of this breakdown for each reference here, as it is to  
provide evidence of their unusually high increase in operating expenses before granting  
their request for an exception to the rent stabilization ordinance. Finally, while property  
taxes did increase from 2019 to 2021, they are estimated to decrease in 2023. The  
Blair estimated 2023 taxes were not a part of the information required to turn in their  
application. It is nonetheless relevant. Taxes is the foundational pillar of their rent  
stabilization ordinance exemption. This also provides a contrast between the situation  
of landlords and tenants. In this case, the landlords’ taxes are expected to decrease in  
the coming year. However, the rent to tenants isn't set, always slated to increase. This  
is the very situation that the people of Saint Paul voted to prevent, and yet their desires  
have been easily sidestepped.  
Cole: Beyond the facts of this case, it must also be said that the current  
implementation of the rent stabilization ordinance is disappointing from a tenant  
standpoint. While it is true, obviously, that tenants have the right to appeal their  
landlord’s exemption request in any determinations made thereof, the process is laden  
with barriers, information asymmetry and vulnerability to retaliation. I personally haven’t  
gone through this process. I had to pay a fee, take the morning off of work and  
schedule a City hearing just to see the basis of which my landlord has requested to  
raise my rent beyond the 3% limit and just to see how high they intended to raise it. It  
is easy to say that this policy is not written with tenants in mind and arguably it isn't  
even written with Saint Paul residents in mind. The ordinance privileges the interests of  
corporate landlord, some of whom are based far outside of city limits over the human  
rights of my neighbors and I, some of whom have been living in and contributing to  
work in Saint Paul for decades, long before the company that now seeks to raise our  
rents, came into possession of the building there. Even now, as my neighbors and I  
exercise our legal right to do an appeal to this decision, not because of, but despite  
the City's process, we are very worried. We're worried that the determination that was  
made, very quickly, behind closed doors without any transparency to us, will be upheld  
just on the basis how it was made. We're worried that the extraordinary promptness, in  
lack of verification involved in the exemption, the process will be used, paradoxically  
as a basis to deny our appeal to that very determination. And we are worried that many  
of the citizens of Saint Paul will soon be priced out of the place that they once called  
home. I love living in Saint Paul and I would stay here for decades and decades if I  
could. But I can't afford to live here, if the rent each year is going to rise several times  
the rate of my wages, despite the nominal presence of rent stabilization in the city.  
Watkins: Saint Paul Rent Stabilization began as a grassroots effort and was approved  
by Saint Paul voters. I was really confused when I received a postcard in the mail  
saying that the rent can be raised anywhere between 3% and 8%. I was horrified to  
learn about the self-certification process. It was very easy on the website and this lack  
of transparency. As a university employee, raises are out of my control. I don't even  
know if I'll get a raise this year, and if I do it won’t be 8%. I'm lucky it will be 3%. In  
fact, I don't know anyone who receives annual raises that high. Simply the  
expectations that tenants receive 8% raises year after year is not sustainable. And  
Saint Paul needs to think about that going forward. The City Council amendments  
makes me wonder if the members are acting on the interest of the citizens of Saint  
Paul or those of corporations? I feel powerless and scared and be priced out of where I  
live as someone with a very secure job. How are we supposed to have faith in our local  
government with amendments like these, amendments that go against what the  
residents of Saint Paul voted for.  
Moermond: I have noted, you are Dr. Watkins, not Ms Watkins. It wasn't on the  
application. I will correct that. Okay, so we start out with an analysis of the accounting,  
and the underlying argument is that the accounting would provide increases in rent  
should translate tenant services and things experience directly by tenants. And if not,  
then it's not a justifiable expense. I just want to kind of dive a little bit more deeply into  
the logic of that.  
Mumm: I think that the main concern is that they are reporting extremely high  
increases of 30% to 50% in some of these categories. And well, you know, there  
hasn't been an improvement in tent experience. I think more of our concern is it's kind  
of a lack of oversight in, you know, these are self-reported numbers. There are many  
categories where they didn't report any on office supplies, any spending on security,  
any spending on insured damage. In 2019, they reported tens of thousands of dollars  
in those categories combined in 2021. And so that combined with the categories that  
show the us in a 30% to 50% increases. I guess I question if 2019 and 2021 are an  
accurate representation of their increase in expenses.  
Cole: We are aware that the ordinance, as amended, makes no distinction between  
reasonable and unreasonable expenses. It does not necessarily remove us from the  
woods, described by Ms. Mumm that 2019 may have been miraculously low expense  
year where we didn't need office supplies or security. But on top of that, you know, it  
just needs to be remarked that we have no control over the administrative costs  
incurred by our landlord, and we should not have to shoulder the burden, especially  
administrative costs. We have no idea if there are reasonable, what they even break  
down to. That didn’t lead to efficiencies in other areas of expenses. The more spending  
and management did not lead to less spending in accounting, and it did not lead to  
less spending on insurance. There's no efficiency gained. there's no quality-of-life  
gained for the tenants. That should be reflected in the determination process. Going  
forward, it may not be reflected in the determination for this case. It needs to be  
remarked that not all expenses are necessarily reasonable.  
Moermond: If you can just give me a moment. I'm going to pause the record. I just  
want for my benefit if I can put my fingers quickly on the ballot initiative language. And  
if I can’t, I will definitely include on the follow-up information. The question seems to  
hinge on the change, or the changes, in the language that might change the meaning  
that was intended. Which it's hard to say with two sentences, but from that to the  
originally adopted ordinance based on that. Then there was an amendment that added  
definitions into it. Some, I would say, very modest additions to make it  
comprehensible. There was a pretty extensive set of amendments that were adopted in  
September of last year. Throughout that amendment process, I'm hearing that you  
believe that it got further and further away from what you understood the intent of the  
ballot initiative was. I want to fact check that the 7 reasons for justification of rent  
increase have remained unchanged. Staff, has your way of evaluating them changed  
from the information that you received? Have you gotten more specific about some  
things that you weren't a specific about before the September 1st amendments? I'm  
thinking one way to answer this would be the DSI administrative rules that were in  
place for reviewing applications received up to December 31st of last year and the DSI  
administrative rules for applications received from January 1st moving forward. Did  
those rules change, in a substantive way, for how you interpret those 7 reasons that  
would be the justification for reasonable increase in rent?  
Sass: I would say no. The rules went through the public comment period. I would say  
the way that the applications are reviewed, hasn't changed substantially, they haven't  
really changed much since the amendments. Aside from the addition of the new  
processes which exist because of the amendments. There are also administrative  
changes on how we would review things like an increase in property taxes, just a  
numerical value.  
Moermond: The changes that have introduced new administrative procedures are more  
around the things like just cause vacancy?  
Sass: Correct.  
Moermond: Okay. And that that is you just building out something new to be able to  
interpret those situations when they come forward from property managers, landlords’  
owners.  
Sass: The amendments added several new processes that DSI needs to manage and  
facilitate. But the actual MNOI process is mostly similar to how it was previously.  
Ferkinhoff: The evaluation of the numbers, how we would look at them, that hasn't  
changed. But in the sense of the self-certified application, what may be different is  
more administrative. For example, prior to January 1st, we didn't have to send  
notifications to tenants to let them know that a landlord had requested a rent increase  
that was above the cap, now we do. That’s an additional procedure, which is more  
procedural, more administrative, than anything which would impact the actual numbers  
that we would get an application.  
Moermond: I do appreciate that; it is not a small lift. I would say medium lift to file an  
appeal and come and talk about it. I know out of the 91 units we have 4 units  
represented. There is a $25 appeal fee that has not change since the 1990's. Please  
not, if you were in any way represented by SMIRLS or another such entity, I waive that  
fee. Just so you have that for your background. With respect to taking time off of  
work, to have this kind of conversation we haven't figured out another way to do it  
better, to tell you the truth. There's emailing information back and forth, which is  
helpful, but it doesn't give us the same kind of benefit is a face-to-face conversation  
when we can loop back in the owner and staff and have this kind of be all of us in the  
same space. Thank you for investing in that. I think that hearing your voices is really  
important and creating a record that articulates your reasoning connected to your  
specific circumstances for this appeal. This is how the Council looks at changes in the  
future, so I appreciate that. I also appreciate that you did take time out of your day.  
There were hardly any comments received on the rules when DSI asked for public  
comment on the changes that went into place on January 1st.  
Ferkinhoff: That that's correct. I want to say that there were a dozen entities, and or  
individuals who submitted public comments.  
Moermond: in comparison to the rules that you put out there in April of 2021 for the  
original implementation of the ordinance?  
Ferkinhoff: Neither Demetrius nor I was employed at that time by the City. But it's in  
the hundreds.  
Moermond: Director Wiese was here and did testify that there were hundreds of  
comments. There was really a drop-off in the public participation component and  
hearing about what that might look like. It could be just because there is a greater  
level of specificity and questions were being answered. You know, agree or disagree, I  
don't know. Again, hearing your voices in the context of not having as much public  
comment at that point, I want to just thank you for doing that. I'm going to look at this  
a little bit more deeply. I am bound by the ordinance language which, you all are aware  
of and that that would be my job. Do any of you have any questions? What I'm thinking  
for myself is that I'm going to review this information, maybe ask some follow-up  
questions. Any additional information that I received from you all, from the property  
managers, I would make sure to share back and forth so that we all again continue to  
operate on the same information and background.  
Moermond: I will reread the ordinance on this point, but I’m not clear that tenants have  
the ability to request “an audit” of an application. Do property owners have an obligation  
to produce that information because tenants are asking for it? Does the City handle  
that and figure out if there's additional questions that they would ask, based on tenant  
commentary? How does the city evaluate when to do that? Can tenants say they don't  
think 2019 was a good year for comparative purposes, I think you should provide us  
with 2020 data? When I have seen base year questions brought up, it has been in the  
context of exceptionally low rents having been collected in the base year or a lack of  
knowledge of what the rents were because there's been a transfer and property  
ownership and the books that were used in 2019 simply are not available to someone  
who acquired in 2020. So those are the 2 circumstances. I can think that's clear.  
Cole: Yeah, do think that is concerning that tenants can’t raise that, while the landlords  
are able to. I want to reiterate that the point that these are all self-reported expenses  
and at 32% increase in operating expenses in 2 years is extremely high. I just want to  
reiterate the concern that there is no oversight on these numbers that they are  
reporting. Again, there is some categories that we didn't report in 2019, that they're  
spending a lot of money and in 2021. And I think that then using those numbers as a  
basis for increasing our rents when there hasn't been any oversight in that process.  
Moermond: What I need to do is look at the math on that. You're in the 30% range for  
some of the items listed as expenses in the MNOI. I think I need to look at whether or  
not what's been produced without audit gets us to 8%, which was the maximum  
request made and whether or not an audit is justified to go even more deeply based on  
the comments that you are raising. In the past when I have done these, it usually  
takes me 2 or 3 weeks to come up with a letter to go out with my recommendation to  
the City Council. And as I indicated right out of the gates, this is a recommendation  
that I'm making. At the very worst, what we've done here today is to create a record.  
We've gotten the documents and comments on the record, the staff report and  
landlords’ information. It's all at least pulled together in one place so that the  
decision-makers have that information coming as their starting point. Again, I  
appreciate you coming in and engaging and this. I'm going to, if you do have more  
questions.  
Mumm: I have a question. During this period where you are looking deeper, making  
the recommendation, can our rents be raised during that period?  
Moermond: No. Any potential rent increase is stayed until a decision is made by the  
City Council, which is the final determination. Then state law requirements with respect  
to notification and so on to apply. A final determination on the application happens 45  
days to pass from the DSI determination being made, unless there is an appeal within  
those 45 days. Yes, Doctor Watkins  
Watkins: I want to emphasize that we’re spending this time we've met together. We're  
thinking of all these things because we really do enjoy living where we live, like we love  
living where we where we live. We all make a certain amount of money. And again, the  
raises are some things. We're doing this because we are really invested and the place  
that we live, and we want to stay where we live. And we’re just trying to see how we can  
do that. You know, with what we have in our bank account, you know, so that's what  
the bottom line is.  
Moermond: Yes, and I will say the financial and emotional investment that is being  
made by you and the residents there is what makes that area so vibrant.  
Cole: I want the record to reflect that the raises above 8% and raises between 3% and  
8% - that dichotomy is largely artificial from our tenant perspective. It's a 6% to 8%  
raise and a 17.5% raise. Well, although those are vastly different numbers, they both  
spell displacements for us. And so, I just want that to be on everyone's mind when  
they're deciding this case that it is not a magnanimity to spare us from the 17.5% in  
rent increase. If we are just going to get hit with a 6% or 8% increase. That is  
structural differentiation. That is codified into law. But structurally meaningless for us  
as living Saint Paul residents.  
Moermond: I am going to push back a little bit and definitions that we are using here.  
The ordinance talks about up to 3% being allowable without having to seek an  
exception. And then the difference between the 3% and up is one up procedure at the  
City, where 3% to 8% is mechanistically decided and then 8% plus is decided using a  
more thorough staff analysis. We now have the more thorough staff analysis on this  
3% to 8% requested increase and are going through the numbers. I hear your  
arguments about the issues of transparency between the 3% and 8% and how that  
gets turned around. And I know that the City administration talks about just the  
amount of staff that would take, a fleet of people that it would take to be able to do  
this. I think that the deal is that we wouldn't be here if it weren't an excess of 3%. That  
is a number that was selected when 3% was the average rent increase. But your point  
about the transparency is super. You know, I hear you. I have to go back and ask for  
these worksheets to be produced. They don't exist in city records. I can't pluck it off  
the shelf and neither can you. Now we can use that and do the analysis and produce  
that.  
Watkins: I think to the comment was about it doesn't matter if it's 8% or it could have  
been 11% or 13%. We cannot live there like we are being displaced. So that's just  
something to for. I think, if I may, I don't want to speak for you, but I think that is a  
large part of what you just said was that it doesn't matter if it's 11% or 13% or 8% we  
are out, you know….  
Moermond: Thank you. I really do appreciate what you said today. It's been very  
thought provoking and helpful. Okay, Ms. Evenson, if you do have comments, I want to  
welcome them right now. Is there anything that you wanted to say before we wrap up?  
We talked earlier any additional information at this point.  
Evenson: No, I don't have any.  
Moermond: Thank you, everyone for your time today.  
Deny the appeal.  
3
RLH RSA 23-3  
Appeal of Levi Indvik to a Rent Stabilization Determination at 400 SELBY  
AVENUE, Apt. 303.  
Balenger  
Sponsors:  
Appellants: Corey Cole, Erika Mumm, Dr. Jamele Watkins  
Property Manager: Michelle Evenson, Reacor  
Staff: Lynne Ferkinhoff & Demetrius Sass, Department of Safety and Inspections  
(DSI)  
Moermond: This is  
a hearing to consider an appeal of a city determination on a  
request for an exemption of the City’s cap on rent increases. The goal of the hearing  
process is to come up with a recommendation for the City Council to consider on the  
appeals. This is a recommendation to the City Council, if for any reason someone  
objects to the recommendation I’ve made, the matter would be discussed by the  
Council and you can share your perspectives. If we hear from an of you who want to  
testify at Council, we want to make sure that the other parties are aware of that. We  
are trying to keep the communication open so all people can have their perspectives  
heard. What I first want to do in appeals cases is to hear from staff and get the  
background on what they looked at and why they came to the determination they did. I  
will ask them to also address some of the questions I have read in the appeals. This  
particular set of appeals came in since the rules change came into effect January 1,  
so this is new to us, too.  
Lynne Ferkinhoff: On January 30, 2023, the department received a self-certified  
application for an exception to the 3% rent increase cap per ordinance 193A. The  
application comprises the entire building of 91 units, including those of the appellants:  
Apartment 303 (Levi Indvik), Apartment 312 (Jamele Watkins), Apartment 327  
(Christine Hackney), and Apartment 332 (Erica Mumm). The intake form is part of the  
record and Michelle Evenson (landlord representing Selby Avenue Realty, LLC) and  
Victoria Koegel (agent representing Reacor, LTD) are listed as the applicants. Ms.  
Koegel and Ms. Evenson submitted the application on behalf of the owner, Selby  
Avenue Realty LLC and the responsible party, Ryan Companies. The applicants noted  
in the application that rent increases will vary based on where the current rent in  
comparison to the market, but not to exceed 8%. The increase was proposed to take  
effect on April 1, 2023. The reasons for the increase listed in the application included  
an increase in real property taxes and an unavoidable increase in operating expenses.  
There are no known code violations for this property. For self-certification, applicants  
are required to provide several pieces of information from the completed worksheet.  
These are used to calculate Maintenance of Net Operating Income or “MNOI”: Gross  
Scheduled Rental Income (GSRI): $1,868,620.46; Fair Net Annual Operating Income  
(NOI): $1,308,142.44; Fair NOI minus Current Year NOI: $213,420.52; Allowable Rent  
Increase Percentage: Not Provided Due to Incorrect Form Being Used.  
While the Allowable Rent Increase Percentage was not provided in the application due  
to the incorrect form being used, it can be calculated from the information given:  
Missed Fair Income ($213,421) divided by Current Year GSRI ($1,868,620) equals the  
Allowable Rent Increase of 11.42%.  
The applicants used an outdated version of the Maintenance of Net Operating Income  
form (likely the outdated version was what was on the city website given the timing of  
the application), so staff is not sure if the data provided for the current year is from  
2021 or 2022. Additionally, the outdated form is pre-populated with the Percent Annual  
Increase in Consumer Price Index (CPI) Base Year to Current Year for 2019 - 2021  
(6.05%). Since 2022 is the correct current year for this comparison, the Percent  
Annual Increase in CPI Base Year to Current Year for 2019 - 2022 is 13.95%, which  
would yield a larger increase than what was approved (16.64% vs 11.42%) assuming  
the current year data is 2022. Please note, however, that self-certified increases are  
capped at 8%. To calculate Percent Annual Increase in CPI Base Year to Current  
Year, the formula would be to take the Current Year Annual Average CPI and subtract  
the Base Year Average CPI and then divide by the Base Year Annual Average CPI.  
Per the self-certification process, the application was approved on February 7, 2023,  
for a maximum of an 8% increase. An approval letter was sent to the Property  
Representative for this request. The letter advised the Property Representative that  
rent cannot be increased in the next 45 days, pending a final determination.  
As required, the applicants provided a Rent Roll that included mailing information for  
91 units in the building. The Rent Roll was used to mail postcards to tenants. The  
February 1, 2023 postcard advised tenants that: 1) the landlord applied for an  
exception to the 3% cap on rent increases; 2) the application was being reviewed by  
City staff; 3) tenants needed to wait until a determination is issued before submitting  
documentation opposing the increase; 4) tenants have the right to appeal the  
determination to the City’s Legislative Hearing Officer. On February 7, 2023 a second  
postcard advised tenants that: 1) the landlord applied for an exception to the 3% cap  
on rent increases; 2) approval was granted for the exception through the  
self-certification process; 3) the determination was not final, and rent cannot be  
increased in the next 45 days.  
Moermond: To recap, some of the high points here. We have an application made in  
January and a notification that follows letting tenants know an application has been  
made for an exception to the rent cap. Then DSI comes up with its decision, which in  
this case an automatic certification because it is in the 3 to 8% range. Then  
notification that a determination was made goes out to tenants. When our office got  
the tenant appeal, we asked the ownership to share the MNOI supporting the  
application. There was some confusion, my office, in getting out the right documents.  
Hopefully everybody has the right information. If people haven't had enough time to  
review it and have additional questions, we can certainly figure out a way to give people  
a chance to metabolize that information. What I heard from the staff review of the  
MNOI was that it was filled out using a base year of 2019 but the current year listed  
here as 2021 and it should have been 2022, perhaps that was because an old  
worksheet was used. Because that happened, the allowable rent increase was in the  
11% range.  
Ferkinhoff: 11.42%  
Moermond: and if the numbers were adjusted to look at 2022 data, the number would  
have been 13.95%?  
Sass: 13.95% would have been the CPI value comparing 2019 to 2022, just changing  
that 6% to 13.95%, by including a small math error I found brings the allowable  
increase to 17.95%. It is still well above the 8% cap for self-certification.  
Moermond: Had it been filled out for an increase in excess of 8% your analysis would  
have been looking at the information submitted which maybe for the wrong year and  
you if it were, you would engage in a back-and-forth conversation with the applicant to  
figure out whether or not on the data was correct. But and based on what we're looking  
at, it would be 11.4% and using the current CPI information that would bring it to  
17.5%. So that is the range that would be allowable if the application would have been  
gone through.  
Ms. Evenson, one thing that struck me, and I don't know if I would have noticed it had  
property tax information not been brought up and the appeals, was what was going on  
with the property taxes. And I did see proposed property tax statements as  
attachments on an appeal. So, I asked the DSI team about looking back at the (final)  
property tax statements for that time, as opposed to the proposed one. Looking at  
that, one thing that was noticeable was that the property tax numbers in the MNOI  
likely reflected the fact that this is a mixed use building, and the MNOI only included  
the residential proportion of the property taxes. When I talked to Mr. Sass about this,  
he determined the proportion of the total property tax bill showing up on the MNOI was  
hovering in the 59 to 61% range.  
Evenson: There's actually 7 parcels associated with this building. We use different  
percentages based on the parcel to calculate what the apartments pays and what the  
commercial space pay. These percentages have been established for many, many  
years. Well prior to my time. I just went off over the apartment building’s financials  
used in the past, since they took ownership in 2017. I broke out the percentages by  
parcel if you need that information.  
Moermond: I think that’s going to introduce a lot more complexity than what we need to  
look at here. This the property tax statement so shows the bill of $516,214. But the  
amount of property taxes listed in your work sheet is $318,641. So that is about 59%  
of that total bill, that you have included here for consideration in your rent increase.  
And then it looks like in 2021, of the $604,282 property tax statement, you are listing  
$360,687, or 61% of that total.  
Evenson: Honestly, I questioned that myself. I downloaded the worksheet from the  
website the week that I completed, and it did say 2021. So, I did complete it using  
2021 numbers.  
Moermond: Right. There was so much transition with implementing the new version of  
the Rent Stabilization ordinance that was a misstep on the City’s part. I don't know that  
we're going to have you need to complete a 2022 version given that the 2021 numbers  
work to give you the rent increase you’re looking for and Mr. Sass reported that if the  
2022 CPI was used, your rent increase could have been significantly higher. Do staff  
have any questions at this point?  
Ferkinhoff: That answered my question of 2021 versus 2022.  
Moermond: Ms. Evenson, do you have questions?  
Evenson: No, I don't. And I guess I just wanted to express that, you know, and we  
knew that we qualified technically for more based on the numbers, but in our own  
wellbeing we didn’t feel like it was right to give our residents that high increases, that's  
why we decided to just go with 8%. So, you know, we are also considering that in our  
steps here as well.  
Moermond: Would you have said between 0 and 8, are the ones that aren't receiving at  
least 3?  
Evenson: Correct, yes. There's a wide range, some that we will not even be 3%. It all  
the determined by where their current rent is compared to what our market rents are.  
And we've also done extensive capital improvements, even in 2022. I believe each unit  
that's appealing has at least received a new furnace, if not a new furnace, new AC and  
water heater. I believe there's one unit that received all 3. So, we're investing money  
back into the property to make it a good place to live. And we need to be able to  
maintain a reasonable, return.  
Moermond: Your application indicated you would begin implementing these rent  
increases in April. Obviously, that is stayed while we have this conversation, then  
people would be receiving increases throughout the course of the next 12 months,  
based on their lease cycle and your specific increase for the unit they occupy.  
Mr. Sass, Ms. Ferkinhoff, when there are capital improvements made to individual  
units that result in variation in the rent increases being charged to them, do you ask  
for a breakdown by unit for the improvements?  
Sass: If capital improvements were listed in the application, which there weren’t, then  
building capital improvements are applied to everybody, individual unit capital  
improvements would be proportioned out to those units.  
Moermond: And does that make a difference based on the amount of capital  
improvements being referenced?  
Sass: In the value? I would say yes, it is typical for especially larger up complexes.  
Something like a faucet might not be a capital improvement to the same extent that a  
new faucet for a single-family home could fall in that dollar value range for a capital  
improvement. Bigger complexes tend to have regular maintenance than single-family  
homes. Sometimes their capital improvements get lumped in with their regular repairs  
and maintenance. So, unless there was something like a multithpousand dollar  
expense, it is likely that larger buildings don't separate that out.  
Evenson: To clarify, the information that I submitted did not include capital expenses.  
Those expenses go above and beyond the figures that we provided. Right or wrong, I  
don't know. But I felt like I completed it, I knew I exceeded it.  
Moermond: I just wanted to clarify it for the record, because you mentioned some units  
had a new AC and some did not. If that was a piece of why Unit A vs unit B received  
an 8% vs a 4%. And you’re right, what I am hearing here is that you can go to an 8%  
based on the numbers you provided.  
The first appeal on my agenda is Ms. Watkin’s appeal. Although you are all here and  
you don’t have to speak in agenda order.  
Erica Mumm: The Blair is requesting an exception to the Rent Stabilization ordinance.  
For the years 2020, 2019 and 2021, they show a disproportionate increase in operating  
costs compared to their reported income. The Blair reported that their operating  
expenses were approximately $586,000 in 2019, the base year and approximately  
$774,000 in 2021. What we are using is the current year. So, this is an increase in  
operating costs of 32% in 2 years with such a drastic increase in operating costs. It  
does raise the concern that the base year had exceptionally low expenses, and that is  
not representative. In addition, there are entries in the spreadsheet that are suspect.  
The Blair reported a 34% increase in the cost of insurance from 2019 and 2021, while  
at the same time claiming that they had $35,500 uninsured damages from 2021 when  
they did not report any uninsured damages in 2019. The Blair did not report any  
spending on office supplies or security in 2019 but they reported spending several  
thousand dollars in these areas for 2021. They also reported a 58% increase in  
spending on management services and reported spending almost 3 and a half times  
the amount of money on accounting in 2021 than they did in 2019. These expense  
increases have not resulted in the expansion of new tenant services nor the  
improvement of existing services. This makes it hard to argue that these expenses are  
fair and reasonable.  
Moermond: So, you are looking for direct tenant benefit resulting from those increases  
in expenses.  
Mumm: Yes, given that 32% increase in reported operating costs from 2019 to 2021  
and the fact that their expenses category reported in 2021 that were not reported in any  
other year, it seems more than prudent to request a breakdown of The Blair’s operating  
expenses and other recent years, not just 2019, and 2021. Further, it also seems  
prudent to request documentation of this breakdown for each reference here, as it is to  
provide evidence of their unusually high increase in operating expenses before granting  
their request for an exception to the rent stabilization ordinance. Finally, while property  
taxes did increase from 2019 to 2021, they are estimated to decrease in 2023. The  
Blair estimated 2023 taxes were not a part of the information required to turn in their  
application. It is nonetheless relevant. Taxes is the foundational pillar of their rent  
stabilization ordinance exemption. This also provides a contrast between the situation  
of landlords and tenants. In this case, the landlords’ taxes are expected to decrease in  
the coming year. However, the rent to tenants isn't set, always slated to increase. This  
is the very situation that the people of Saint Paul voted to prevent, and yet their desires  
have been easily sidestepped.  
Cole: Beyond the facts of this case, it must also be said that the current  
implementation of the rent stabilization ordinance is disappointing from a tenant  
standpoint. While it is true, obviously, that tenants have the right to appeal their  
landlord’s exemption request in any determinations made thereof, the process is laden  
with barriers, information asymmetry and vulnerability to retaliation. I personally haven’t  
gone through this process. I had to pay a fee, take the morning off of work and  
schedule a City hearing just to see the basis of which my landlord has requested to  
raise my rent beyond the 3% limit and just to see how high they intended to raise it. It  
is easy to say that this policy is not written with tenants in mind and arguably it isn't  
even written with Saint Paul residents in mind. The ordinance privileges the interests of  
corporate landlord, some of whom are based far outside of city limits over the human  
rights of my neighbors and I, some of whom have been living in and contributing to  
work in Saint Paul for decades, long before the company that now seeks to raise our  
rents, came into possession of the building there. Even now, as my neighbors and I  
exercise our legal right to do an appeal to this decision, not because of, but despite  
the City's process, we are very worried. We're worried that the determination that was  
made, very quickly, behind closed doors without any transparency to us, will be upheld  
just on the basis how it was made. We're worried that the extraordinary promptness, in  
lack of verification involved in the exemption, the process will be used, paradoxically  
as a basis to deny our appeal to that very determination. And we are worried that many  
of the citizens of Saint Paul will soon be priced out of the place that they once called  
home. I love living in Saint Paul and I would stay here for decades and decades if I  
could. But I can't afford to live here, if the rent each year is going to rise several times  
the rate of my wages, despite the nominal presence of rent stabilization in the city.  
Watkins: Saint Paul Rent Stabilization began as a grassroots effort and was approved  
by Saint Paul voters. I was really confused when I received a postcard in the mail  
saying that the rent can be raised anywhere between 3% and 8%. I was horrified to  
learn about the self-certification process. It was very easy on the website and this lack  
of transparency. As a university employee, raises are out of my control. I don't even  
know if I'll get a raise this year, and if I do it won’t be 8%. I'm lucky it will be 3%. In  
fact, I don't know anyone who receives annual raises that high. Simply the  
expectations that tenants receive 8% raises year after year is not sustainable. And  
Saint Paul needs to think about that going forward. The City Council amendments  
makes me wonder if the members are acting on the interest of the citizens of Saint  
Paul or those of corporations? I feel powerless and scared and be priced out of where I  
live as someone with a very secure job. How are we supposed to have faith in our local  
government with amendments like these, amendments that go against what the  
residents of Saint Paul voted for.  
Moermond: I have noted, you are Dr. Watkins, not Ms Watkins. It wasn't on the  
application. I will correct that. Okay, so we start out with an analysis of the accounting,  
and the underlying argument is that the accounting would provide increases in rent  
should translate tenant services and things experience directly by tenants. And if not,  
then it's not a justifiable expense. I just want to kind of dive a little bit more deeply into  
the logic of that.  
Mumm: I think that the main concern is that they are reporting extremely high  
increases of 30% to 50% in some of these categories. And well, you know, there  
hasn't been an improvement in tent experience. I think more of our concern is it's kind  
of a lack of oversight in, you know, these are self-reported numbers. There are many  
categories where they didn't report any on office supplies, any spending on security,  
any spending on insured damage. In 2019, they reported tens of thousands of dollars  
in those categories combined in 2021. And so that combined with the categories that  
show the us in a 30% to 50% increases. I guess I question if 2019 and 2021 are an  
accurate representation of their increase in expenses.  
Cole: We are aware that the ordinance, as amended, makes no distinction between  
reasonable and unreasonable expenses. It does not necessarily remove us from the  
woods, described by Ms. Mumm that 2019 may have been miraculously low expense  
year where we didn't need office supplies or security. But on top of that, you know, it  
just needs to be remarked that we have no control over the administrative costs  
incurred by our landlord, and we should not have to shoulder the burden, especially  
administrative costs. We have no idea if there are reasonable, what they even break  
down to. That didn’t lead to efficiencies in other areas of expenses. The more spending  
and management did not lead to less spending in accounting, and it did not lead to  
less spending on insurance. There's no efficiency gained. there's no quality-of-life  
gained for the tenants. That should be reflected in the determination process. Going  
forward, it may not be reflected in the determination for this case. It needs to be  
remarked that not all expenses are necessarily reasonable.  
Moermond: If you can just give me a moment. I'm going to pause the record. I just  
want for my benefit if I can put my fingers quickly on the ballot initiative language. And  
if I can’t, I will definitely include on the follow-up information. The question seems to  
hinge on the change, or the changes, in the language that might change the meaning  
that was intended. Which it's hard to say with two sentences, but from that to the  
originally adopted ordinance based on that. Then there was an amendment that added  
definitions into it. Some, I would say, very modest additions to make it  
comprehensible. There was a pretty extensive set of amendments that were adopted in  
September of last year. Throughout that amendment process, I'm hearing that you  
believe that it got further and further away from what you understood the intent of the  
ballot initiative was. I want to fact check that the 7 reasons for justification of rent  
increase have remained unchanged. Staff, has your way of evaluating them changed  
from the information that you received? Have you gotten more specific about some  
things that you weren't a specific about before the September 1st amendments? I'm  
thinking one way to answer this would be the DSI administrative rules that were in  
place for reviewing applications received up to December 31st of last year and the DSI  
administrative rules for applications received from January 1st moving forward. Did  
those rules change, in a substantive way, for how you interpret those 7 reasons that  
would be the justification for reasonable increase in rent?  
Sass: I would say no. The rules went through the public comment period. I would say  
the way that the applications are reviewed, hasn't changed substantially, they haven't  
really changed much since the amendments. Aside from the addition of the new  
processes which exist because of the amendments. There are also administrative  
changes on how we would review things like an increase in property taxes, just a  
numerical value.  
Moermond: The changes that have introduced new administrative procedures are more  
around the things like just cause vacancy?  
Sass: Correct.  
Moermond: Okay. And that that is you just building out something new to be able to  
interpret those situations when they come forward from property managers, landlords’  
owners.  
Sass: The amendments added several new processes that DSI needs to manage and  
facilitate. But the actual MNOI process is mostly similar to how it was previously.  
Ferkinhoff: The evaluation of the numbers, how we would look at them, that hasn't  
changed. But in the sense of the self-certified application, what may be different is  
more administrative. For example, prior to January 1st, we didn't have to send  
notifications to tenants to let them know that a landlord had requested a rent increase  
that was above the cap, now we do. That’s an additional procedure, which is more  
procedural, more administrative, than anything which would impact the actual numbers  
that we would get an application.  
Moermond: I do appreciate that; it is not a small lift. I would say medium lift to file an  
appeal and come and talk about it. I know out of the 91 units we have 4 units  
represented. There is a $25 appeal fee that has not change since the 1990's. Please  
not, if you were in any way represented by SMIRLS or another such entity, I waive that  
fee. Just so you have that for your background. With respect to taking time off of  
work, to have this kind of conversation we haven't figured out another way to do it  
better, to tell you the truth. There's emailing information back and forth, which is  
helpful, but it doesn't give us the same kind of benefit is a face-to-face conversation  
when we can loop back in the owner and staff and have this kind of be all of us in the  
same space. Thank you for investing in that. I think that hearing your voices is really  
important and creating a record that articulates your reasoning connected to your  
specific circumstances for this appeal. This is how the Council looks at changes in the  
future, so I appreciate that. I also appreciate that you did take time out of your day.  
There were hardly any comments received on the rules when DSI asked for public  
comment on the changes that went into place on January 1st.  
Ferkinhoff: That that's correct. I want to say that there were a dozen entities, and or  
individuals who submitted public comments.  
Moermond: in comparison to the rules that you put out there in April of 2021 for the  
original implementation of the ordinance?  
Ferkinhoff: Neither Demetrius nor I was employed at that time by the City. But it's in  
the hundreds.  
Moermond: Director Wiese was here and did testify that there were hundreds of  
comments. There was really a drop-off in the public participation component and  
hearing about what that might look like. It could be just because there is a greater  
level of specificity and questions were being answered. You know, agree or disagree, I  
don't know. Again, hearing your voices in the context of not having as much public  
comment at that point, I want to just thank you for doing that. I'm going to look at this  
a little bit more deeply. I am bound by the ordinance language which, you all are aware  
of and that that would be my job. Do any of you have any questions? What I'm thinking  
for myself is that I'm going to review this information, maybe ask some follow-up  
questions. Any additional information that I received from you all, from the property  
managers, I would make sure to share back and forth so that we all again continue to  
operate on the same information and background.  
Moermond: I will reread the ordinance on this point, but I’m not clear that tenants have  
the ability to request “an audit” of an application. Do property owners have an obligation  
to produce that information because tenants are asking for it? Does the City handle  
that and figure out if there's additional questions that they would ask, based on tenant  
commentary? How does the city evaluate when to do that? Can tenants say they don't  
think 2019 was a good year for comparative purposes, I think you should provide us  
with 2020 data? When I have seen base year questions brought up, it has been in the  
context of exceptionally low rents having been collected in the base year or a lack of  
knowledge of what the rents were because there's been a transfer and property  
ownership and the books that were used in 2019 simply are not available to someone  
who acquired in 2020. So those are the 2 circumstances. I can think that's clear.  
Cole: Yeah, do think that is concerning that tenants can’t raise that, while the landlords  
are able to. I want to reiterate that the point that these are all self-reported expenses  
and at 32% increase in operating expenses in 2 years is extremely high. I just want to  
reiterate the concern that there is no oversight on these numbers that they are  
reporting. Again, there is some categories that we didn't report in 2019, that they're  
spending a lot of money and in 2021. And I think that then using those numbers as a  
basis for increasing our rents when there hasn't been any oversight in that process.  
Moermond: What I need to do is look at the math on that. You're in the 30% range for  
some of the items listed as expenses in the MNOI. I think I need to look at whether or  
not what's been produced without audit gets us to 8%, which was the maximum  
request made and whether or not an audit is justified to go even more deeply based on  
the comments that you are raising. In the past when I have done these, it usually  
takes me 2 or 3 weeks to come up with a letter to go out with my recommendation to  
the City Council. And as I indicated right out of the gates, this is a recommendation  
that I'm making. At the very worst, what we've done here today is to create a record.  
We've gotten the documents and comments on the record, the staff report and  
landlords’ information. It's all at least pulled together in one place so that the  
decision-makers have that information coming as their starting point. Again, I  
appreciate you coming in and engaging and this. I'm going to, if you do have more  
questions.  
Mumm: I have a question. During this period where you are looking deeper, making  
the recommendation, can our rents be raised during that period?  
Moermond: No. Any potential rent increase is stayed until a decision is made by the  
City Council, which is the final determination. Then state law requirements with respect  
to notification and so on to apply. A final determination on the application happens 45  
days to pass from the DSI determination being made, unless there is an appeal within  
those 45 days. Yes, Doctor Watkins  
Watkins: I want to emphasize that we’re spending this time we've met together. We're  
thinking of all these things because we really do enjoy living where we live, like we love  
living where we where we live. We all make a certain amount of money. And again, the  
raises are some things. We're doing this because we are really invested and the place  
that we live, and we want to stay where we live. And we’re just trying to see how we can  
do that. You know, with what we have in our bank account, you know, so that's what  
the bottom line is.  
Moermond: Yes, and I will say the financial and emotional investment that is being  
made by you and the residents there is what makes that area so vibrant.  
Cole: I want the record to reflect that the raises above 8% and raises between 3% and  
8% - that dichotomy is largely artificial from our tenant perspective. It's a 6% to 8%  
raise and a 17.5% raise. Well, although those are vastly different numbers, they both  
spell displacements for us. And so, I just want that to be on everyone's mind when  
they're deciding this case that it is not a magnanimity to spare us from the 17.5% in  
rent increase. If we are just going to get hit with a 6% or 8% increase. That is  
structural differentiation. That is codified into law. But structurally meaningless for us  
as living Saint Paul residents.  
Moermond: I am going to push back a little bit and definitions that we are using here.  
The ordinance talks about up to 3% being allowable without having to seek an  
exception. And then the difference between the 3% and up is one up procedure at the  
City, where 3% to 8% is mechanistically decided and then 8% plus is decided using a  
more thorough staff analysis. We now have the more thorough staff analysis on this  
3% to 8% requested increase and are going through the numbers. I hear your  
arguments about the issues of transparency between the 3% and 8% and how that  
gets turned around. And I know that the City administration talks about just the  
amount of staff that would take, a fleet of people that it would take to be able to do  
this. I think that the deal is that we wouldn't be here if it weren't an excess of 3%. That  
is a number that was selected when 3% was the average rent increase. But your point  
about the transparency is super. You know, I hear you. I have to go back and ask for  
these worksheets to be produced. They don't exist in city records. I can't pluck it off  
the shelf and neither can you. Now we can use that and do the analysis and produce  
that.  
Watkins: I think to the comment was about it doesn't matter if it's 8% or it could have  
been 11% or 13%. We cannot live there like we are being displaced. So that's just  
something to for. I think, if I may, I don't want to speak for you, but I think that is a  
large part of what you just said was that it doesn't matter if it's 11% or 13% or 8% we  
are out, you know….  
Moermond: Thank you. I really do appreciate what you said today. It's been very  
thought provoking and helpful. Okay, Ms. Evenson, if you do have comments, I want to  
welcome them right now. Is there anything that you wanted to say before we wrap up?  
We talked earlier any additional information at this point.  
Evenson: No, I don't have any.  
Moermond: Thank you, everyone for your time today.  
Deny the appeal.  
4
RLH RSA 23-4  
Appeal of Erica Mumm to a Rent Stabilization Determination at 400  
SELBY AVENUE, Apt. 332.  
Balenger  
Sponsors:  
Appellants: Corey Cole, Erika Mumm, Dr. Jamele Watkins  
Property Manager: Michelle Evenson, Reacor  
Staff: Lynne Ferkinhoff & Demetrius Sass, Department of Safety and Inspections  
(DSI)  
Moermond: This is  
a hearing to consider an appeal of a city determination on a  
request for an exemption of the City’s cap on rent increases. The goal of the hearing  
process is to come up with a recommendation for the City Council to consider on the  
appeals. This is a recommendation to the City Council, if for any reason someone  
objects to the recommendation I’ve made, the matter would be discussed by the  
Council and you can share your perspectives. If we hear from an of you who want to  
testify at Council, we want to make sure that the other parties are aware of that. We  
are trying to keep the communication open so all people can have their perspectives  
heard. What I first want to do in appeals cases is to hear from staff and get the  
background on what they looked at and why they came to the determination they did. I  
will ask them to also address some of the questions I have read in the appeals. This  
particular set of appeals came in since the rules change came into effect January 1,  
so this is new to us, too.  
Lynne Ferkinhoff: On January 30, 2023, the department received a self-certified  
application for an exception to the 3% rent increase cap per ordinance 193A. The  
application comprises the entire building of 91 units, including those of the appellants:  
Apartment 303 (Levi Indvik), Apartment 312 (Jamele Watkins), Apartment 327  
(Christine Hackney), and Apartment 332 (Erica Mumm). The intake form is part of the  
record and Michelle Evenson (landlord representing Selby Avenue Realty, LLC) and  
Victoria Koegel (agent representing Reacor, LTD) are listed as the applicants. Ms.  
Koegel and Ms. Evenson submitted the application on behalf of the owner, Selby  
Avenue Realty LLC and the responsible party, Ryan Companies. The applicants noted  
in the application that rent increases will vary based on where the current rent in  
comparison to the market, but not to exceed 8%. The increase was proposed to take  
effect on April 1, 2023. The reasons for the increase listed in the application included  
an increase in real property taxes and an unavoidable increase in operating expenses.  
There are no known code violations for this property. For self-certification, applicants  
are required to provide several pieces of information from the completed worksheet.  
These are used to calculate Maintenance of Net Operating Income or “MNOI”: Gross  
Scheduled Rental Income (GSRI): $1,868,620.46; Fair Net Annual Operating Income  
(NOI): $1,308,142.44; Fair NOI minus Current Year NOI: $213,420.52; Allowable Rent  
Increase Percentage: Not Provided Due to Incorrect Form Being Used.  
While the Allowable Rent Increase Percentage was not provided in the application due  
to the incorrect form being used, it can be calculated from the information given:  
Missed Fair Income ($213,421) divided by Current Year GSRI ($1,868,620) equals the  
Allowable Rent Increase of 11.42%.  
The applicants used an outdated version of the Maintenance of Net Operating Income  
form (likely the outdated version was what was on the city website given the timing of  
the application), so staff is not sure if the data provided for the current year is from  
2021 or 2022. Additionally, the outdated form is pre-populated with the Percent Annual  
Increase in Consumer Price Index (CPI) Base Year to Current Year for 2019 - 2021  
(6.05%). Since 2022 is the correct current year for this comparison, the Percent  
Annual Increase in CPI Base Year to Current Year for 2019 - 2022 is 13.95%, which  
would yield a larger increase than what was approved (16.64% vs 11.42%) assuming  
the current year data is 2022. Please note, however, that self-certified increases are  
capped at 8%. To calculate Percent Annual Increase in CPI Base Year to Current  
Year, the formula would be to take the Current Year Annual Average CPI and subtract  
the Base Year Average CPI and then divide by the Base Year Annual Average CPI.  
Per the self-certification process, the application was approved on February 7, 2023,  
for a maximum of an 8% increase. An approval letter was sent to the Property  
Representative for this request. The letter advised the Property Representative that  
rent cannot be increased in the next 45 days, pending a final determination.  
As required, the applicants provided a Rent Roll that included mailing information for  
91 units in the building. The Rent Roll was used to mail postcards to tenants. The  
February 1, 2023 postcard advised tenants that: 1) the landlord applied for an  
exception to the 3% cap on rent increases; 2) the application was being reviewed by  
City staff; 3) tenants needed to wait until a determination is issued before submitting  
documentation opposing the increase; 4) tenants have the right to appeal the  
determination to the City’s Legislative Hearing Officer. On February 7, 2023 a second  
postcard advised tenants that: 1) the landlord applied for an exception to the 3% cap  
on rent increases; 2) approval was granted for the exception through the  
self-certification process; 3) the determination was not final, and rent cannot be  
increased in the next 45 days.  
Moermond: To recap, some of the high points here. We have an application made in  
January and a notification that follows letting tenants know an application has been  
made for an exception to the rent cap. Then DSI comes up with its decision, which in  
this case an automatic certification because it is in the 3 to 8% range. Then  
notification that a determination was made goes out to tenants. When our office got  
the tenant appeal, we asked the ownership to share the MNOI supporting the  
application. There was some confusion, my office, in getting out the right documents.  
Hopefully everybody has the right information. If people haven't had enough time to  
review it and have additional questions, we can certainly figure out a way to give people  
a chance to metabolize that information. What I heard from the staff review of the  
MNOI was that it was filled out using a base year of 2019 but the current year listed  
here as 2021 and it should have been 2022, perhaps that was because an old  
worksheet was used. Because that happened, the allowable rent increase was in the  
11% range.  
Ferkinhoff: 11.42%  
Moermond: and if the numbers were adjusted to look at 2022 data, the number would  
have been 13.95%?  
Sass: 13.95% would have been the CPI value comparing 2019 to 2022, just changing  
that 6% to 13.95%, by including a small math error I found brings the allowable  
increase to 17.95%. It is still well above the 8% cap for self-certification.  
Moermond: Had it been filled out for an increase in excess of 8% your analysis would  
have been looking at the information submitted which maybe for the wrong year and  
you if it were, you would engage in a back-and-forth conversation with the applicant to  
figure out whether or not on the data was correct. But and based on what we're looking  
at, it would be 11.4% and using the current CPI information that would bring it to  
17.5%. So that is the range that would be allowable if the application would have been  
gone through.  
Ms. Evenson, one thing that struck me, and I don't know if I would have noticed it had  
property tax information not been brought up and the appeals, was what was going on  
with the property taxes. And I did see proposed property tax statements as  
attachments on an appeal. So, I asked the DSI team about looking back at the (final)  
property tax statements for that time, as opposed to the proposed one. Looking at  
that, one thing that was noticeable was that the property tax numbers in the MNOI  
likely reflected the fact that this is a mixed use building, and the MNOI only included  
the residential proportion of the property taxes. When I talked to Mr. Sass about this,  
he determined the proportion of the total property tax bill showing up on the MNOI was  
hovering in the 59 to 61% range.  
Evenson: There's actually 7 parcels associated with this building. We use different  
percentages based on the parcel to calculate what the apartments pays and what the  
commercial space pay. These percentages have been established for many, many  
years. Well prior to my time. I just went off over the apartment building’s financials  
used in the past, since they took ownership in 2017. I broke out the percentages by  
parcel if you need that information.  
Moermond: I think that’s going to introduce a lot more complexity than what we need to  
look at here. This the property tax statement so shows the bill of $516,214. But the  
amount of property taxes listed in your work sheet is $318,641. So that is about 59%  
of that total bill, that you have included here for consideration in your rent increase.  
And then it looks like in 2021, of the $604,282 property tax statement, you are listing  
$360,687, or 61% of that total.  
Evenson: Honestly, I questioned that myself. I downloaded the worksheet from the  
website the week that I completed, and it did say 2021. So, I did complete it using  
2021 numbers.  
Moermond: Right. There was so much transition with implementing the new version of  
the Rent Stabilization ordinance that was a misstep on the City’s part. I don't know that  
we're going to have you need to complete a 2022 version given that the 2021 numbers  
work to give you the rent increase you’re looking for and Mr. Sass reported that if the  
2022 CPI was used, your rent increase could have been significantly higher. Do staff  
have any questions at this point?  
Ferkinhoff: That answered my question of 2021 versus 2022.  
Moermond: Ms. Evenson, do you have questions?  
Evenson: No, I don't. And I guess I just wanted to express that, you know, and we  
knew that we qualified technically for more based on the numbers, but in our own  
wellbeing we didn’t feel like it was right to give our residents that high increases, that's  
why we decided to just go with 8%. So, you know, we are also considering that in our  
steps here as well.  
Moermond: Would you have said between 0 and 8, are the ones that aren't receiving at  
least 3?  
Evenson: Correct, yes. There's a wide range, some that we will not even be 3%. It all  
the determined by where their current rent is compared to what our market rents are.  
And we've also done extensive capital improvements, even in 2022. I believe each unit  
that's appealing has at least received a new furnace, if not a new furnace, new AC and  
water heater. I believe there's one unit that received all 3. So, we're investing money  
back into the property to make it a good place to live. And we need to be able to  
maintain a reasonable, return.  
Moermond: Your application indicated you would begin implementing these rent  
increases in April. Obviously, that is stayed while we have this conversation, then  
people would be receiving increases throughout the course of the next 12 months,  
based on their lease cycle and your specific increase for the unit they occupy.  
Mr. Sass, Ms. Ferkinhoff, when there are capital improvements made to individual  
units that result in variation in the rent increases being charged to them, do you ask  
for a breakdown by unit for the improvements?  
Sass: If capital improvements were listed in the application, which there weren’t, then  
building capital improvements are applied to everybody, individual unit capital  
improvements would be proportioned out to those units.  
Moermond: And does that make a difference based on the amount of capital  
improvements being referenced?  
Sass: In the value? I would say yes, it is typical for especially larger up complexes.  
Something like a faucet might not be a capital improvement to the same extent that a  
new faucet for a single-family home could fall in that dollar value range for a capital  
improvement. Bigger complexes tend to have regular maintenance than single-family  
homes. Sometimes their capital improvements get lumped in with their regular repairs  
and maintenance. So, unless there was something like a multithpousand dollar  
expense, it is likely that larger buildings don't separate that out.  
Evenson: To clarify, the information that I submitted did not include capital expenses.  
Those expenses go above and beyond the figures that we provided. Right or wrong, I  
don't know. But I felt like I completed it, I knew I exceeded it.  
Moermond: I just wanted to clarify it for the record, because you mentioned some units  
had a new AC and some did not. If that was a piece of why Unit A vs unit B received  
an 8% vs a 4%. And you’re right, what I am hearing here is that you can go to an 8%  
based on the numbers you provided.  
The first appeal on my agenda is Ms. Watkin’s appeal. Although you are all here and  
you don’t have to speak in agenda order.  
Erica Mumm: The Blair is requesting an exception to the Rent Stabilization ordinance.  
For the years 2020, 2019 and 2021, they show a disproportionate increase in operating  
costs compared to their reported income. The Blair reported that their operating  
expenses were approximately $586,000 in 2019, the base year and approximately  
$774,000 in 2021. What we are using is the current year. So, this is an increase in  
operating costs of 32% in 2 years with such a drastic increase in operating costs. It  
does raise the concern that the base year had exceptionally low expenses, and that is  
not representative. In addition, there are entries in the spreadsheet that are suspect.  
The Blair reported a 34% increase in the cost of insurance from 2019 and 2021, while  
at the same time claiming that they had $35,500 uninsured damages from 2021 when  
they did not report any uninsured damages in 2019. The Blair did not report any  
spending on office supplies or security in 2019 but they reported spending several  
thousand dollars in these areas for 2021. They also reported a 58% increase in  
spending on management services and reported spending almost 3 and a half times  
the amount of money on accounting in 2021 than they did in 2019. These expense  
increases have not resulted in the expansion of new tenant services nor the  
improvement of existing services. This makes it hard to argue that these expenses are  
fair and reasonable.  
Moermond: So, you are looking for direct tenant benefit resulting from those increases  
in expenses.  
Mumm: Yes, given that 32% increase in reported operating costs from 2019 to 2021  
and the fact that their expenses category reported in 2021 that were not reported in any  
other year, it seems more than prudent to request a breakdown of The Blair’s operating  
expenses and other recent years, not just 2019, and 2021. Further, it also seems  
prudent to request documentation of this breakdown for each reference here, as it is to  
provide evidence of their unusually high increase in operating expenses before granting  
their request for an exception to the rent stabilization ordinance. Finally, while property  
taxes did increase from 2019 to 2021, they are estimated to decrease in 2023. The  
Blair estimated 2023 taxes were not a part of the information required to turn in their  
application. It is nonetheless relevant. Taxes is the foundational pillar of their rent  
stabilization ordinance exemption. This also provides a contrast between the situation  
of landlords and tenants. In this case, the landlords’ taxes are expected to decrease in  
the coming year. However, the rent to tenants isn't set, always slated to increase. This  
is the very situation that the people of Saint Paul voted to prevent, and yet their desires  
have been easily sidestepped.  
Cole: Beyond the facts of this case, it must also be said that the current  
implementation of the rent stabilization ordinance is disappointing from a tenant  
standpoint. While it is true, obviously, that tenants have the right to appeal their  
landlord’s exemption request in any determinations made thereof, the process is laden  
with barriers, information asymmetry and vulnerability to retaliation. I personally haven’t  
gone through this process. I had to pay a fee, take the morning off of work and  
schedule a City hearing just to see the basis of which my landlord has requested to  
raise my rent beyond the 3% limit and just to see how high they intended to raise it. It  
is easy to say that this policy is not written with tenants in mind and arguably it isn't  
even written with Saint Paul residents in mind. The ordinance privileges the interests of  
corporate landlord, some of whom are based far outside of city limits over the human  
rights of my neighbors and I, some of whom have been living in and contributing to  
work in Saint Paul for decades, long before the company that now seeks to raise our  
rents, came into possession of the building there. Even now, as my neighbors and I  
exercise our legal right to do an appeal to this decision, not because of, but despite  
the City's process, we are very worried. We're worried that the determination that was  
made, very quickly, behind closed doors without any transparency to us, will be upheld  
just on the basis how it was made. We're worried that the extraordinary promptness, in  
lack of verification involved in the exemption, the process will be used, paradoxically  
as a basis to deny our appeal to that very determination. And we are worried that many  
of the citizens of Saint Paul will soon be priced out of the place that they once called  
home. I love living in Saint Paul and I would stay here for decades and decades if I  
could. But I can't afford to live here, if the rent each year is going to rise several times  
the rate of my wages, despite the nominal presence of rent stabilization in the city.  
Watkins: Saint Paul Rent Stabilization began as a grassroots effort and was approved  
by Saint Paul voters. I was really confused when I received a postcard in the mail  
saying that the rent can be raised anywhere between 3% and 8%. I was horrified to  
learn about the self-certification process. It was very easy on the website and this lack  
of transparency. As a university employee, raises are out of my control. I don't even  
know if I'll get a raise this year, and if I do it won’t be 8%. I'm lucky it will be 3%. In  
fact, I don't know anyone who receives annual raises that high. Simply the  
expectations that tenants receive 8% raises year after year is not sustainable. And  
Saint Paul needs to think about that going forward. The City Council amendments  
makes me wonder if the members are acting on the interest of the citizens of Saint  
Paul or those of corporations? I feel powerless and scared and be priced out of where I  
live as someone with a very secure job. How are we supposed to have faith in our local  
government with amendments like these, amendments that go against what the  
residents of Saint Paul voted for.  
Moermond: I have noted, you are Dr. Watkins, not Ms Watkins. It wasn't on the  
application. I will correct that. Okay, so we start out with an analysis of the accounting,  
and the underlying argument is that the accounting would provide increases in rent  
should translate tenant services and things experience directly by tenants. And if not,  
then it's not a justifiable expense. I just want to kind of dive a little bit more deeply into  
the logic of that.  
Mumm: I think that the main concern is that they are reporting extremely high  
increases of 30% to 50% in some of these categories. And well, you know, there  
hasn't been an improvement in tent experience. I think more of our concern is it's kind  
of a lack of oversight in, you know, these are self-reported numbers. There are many  
categories where they didn't report any on office supplies, any spending on security,  
any spending on insured damage. In 2019, they reported tens of thousands of dollars  
in those categories combined in 2021. And so that combined with the categories that  
show the us in a 30% to 50% increases. I guess I question if 2019 and 2021 are an  
accurate representation of their increase in expenses.  
Cole: We are aware that the ordinance, as amended, makes no distinction between  
reasonable and unreasonable expenses. It does not necessarily remove us from the  
woods, described by Ms. Mumm that 2019 may have been miraculously low expense  
year where we didn't need office supplies or security. But on top of that, you know, it  
just needs to be remarked that we have no control over the administrative costs  
incurred by our landlord, and we should not have to shoulder the burden, especially  
administrative costs. We have no idea if there are reasonable, what they even break  
down to. That didn’t lead to efficiencies in other areas of expenses. The more spending  
and management did not lead to less spending in accounting, and it did not lead to  
less spending on insurance. There's no efficiency gained. there's no quality-of-life  
gained for the tenants. That should be reflected in the determination process. Going  
forward, it may not be reflected in the determination for this case. It needs to be  
remarked that not all expenses are necessarily reasonable.  
Moermond: If you can just give me a moment. I'm going to pause the record. I just  
want for my benefit if I can put my fingers quickly on the ballot initiative language. And  
if I can’t, I will definitely include on the follow-up information. The question seems to  
hinge on the change, or the changes, in the language that might change the meaning  
that was intended. Which it's hard to say with two sentences, but from that to the  
originally adopted ordinance based on that. Then there was an amendment that added  
definitions into it. Some, I would say, very modest additions to make it  
comprehensible. There was a pretty extensive set of amendments that were adopted in  
September of last year. Throughout that amendment process, I'm hearing that you  
believe that it got further and further away from what you understood the intent of the  
ballot initiative was. I want to fact check that the 7 reasons for justification of rent  
increase have remained unchanged. Staff, has your way of evaluating them changed  
from the information that you received? Have you gotten more specific about some  
things that you weren't a specific about before the September 1st amendments? I'm  
thinking one way to answer this would be the DSI administrative rules that were in  
place for reviewing applications received up to December 31st of last year and the DSI  
administrative rules for applications received from January 1st moving forward. Did  
those rules change, in a substantive way, for how you interpret those 7 reasons that  
would be the justification for reasonable increase in rent?  
Sass: I would say no. The rules went through the public comment period. I would say  
the way that the applications are reviewed, hasn't changed substantially, they haven't  
really changed much since the amendments. Aside from the addition of the new  
processes which exist because of the amendments. There are also administrative  
changes on how we would review things like an increase in property taxes, just a  
numerical value.  
Moermond: The changes that have introduced new administrative procedures are more  
around the things like just cause vacancy?  
Sass: Correct.  
Moermond: Okay. And that that is you just building out something new to be able to  
interpret those situations when they come forward from property managers, landlords’  
owners.  
Sass: The amendments added several new processes that DSI needs to manage and  
facilitate. But the actual MNOI process is mostly similar to how it was previously.  
Ferkinhoff: The evaluation of the numbers, how we would look at them, that hasn't  
changed. But in the sense of the self-certified application, what may be different is  
more administrative. For example, prior to January 1st, we didn't have to send  
notifications to tenants to let them know that a landlord had requested a rent increase  
that was above the cap, now we do. That’s an additional procedure, which is more  
procedural, more administrative, than anything which would impact the actual numbers  
that we would get an application.  
Moermond: I do appreciate that; it is not a small lift. I would say medium lift to file an  
appeal and come and talk about it. I know out of the 91 units we have 4 units  
represented. There is a $25 appeal fee that has not change since the 1990's. Please  
not, if you were in any way represented by SMIRLS or another such entity, I waive that  
fee. Just so you have that for your background. With respect to taking time off of  
work, to have this kind of conversation we haven't figured out another way to do it  
better, to tell you the truth. There's emailing information back and forth, which is  
helpful, but it doesn't give us the same kind of benefit is a face-to-face conversation  
when we can loop back in the owner and staff and have this kind of be all of us in the  
same space. Thank you for investing in that. I think that hearing your voices is really  
important and creating a record that articulates your reasoning connected to your  
specific circumstances for this appeal. This is how the Council looks at changes in the  
future, so I appreciate that. I also appreciate that you did take time out of your day.  
There were hardly any comments received on the rules when DSI asked for public  
comment on the changes that went into place on January 1st.  
Ferkinhoff: That that's correct. I want to say that there were a dozen entities, and or  
individuals who submitted public comments.  
Moermond: in comparison to the rules that you put out there in April of 2021 for the  
original implementation of the ordinance?  
Ferkinhoff: Neither Demetrius nor I was employed at that time by the City. But it's in  
the hundreds.  
Moermond: Director Wiese was here and did testify that there were hundreds of  
comments. There was really a drop-off in the public participation component and  
hearing about what that might look like. It could be just because there is a greater  
level of specificity and questions were being answered. You know, agree or disagree, I  
don't know. Again, hearing your voices in the context of not having as much public  
comment at that point, I want to just thank you for doing that. I'm going to look at this  
a little bit more deeply. I am bound by the ordinance language which, you all are aware  
of and that that would be my job. Do any of you have any questions? What I'm thinking  
for myself is that I'm going to review this information, maybe ask some follow-up  
questions. Any additional information that I received from you all, from the property  
managers, I would make sure to share back and forth so that we all again continue to  
operate on the same information and background.  
Moermond: I will reread the ordinance on this point, but I’m not clear that tenants have  
the ability to request “an audit” of an application. Do property owners have an obligation  
to produce that information because tenants are asking for it? Does the City handle  
that and figure out if there's additional questions that they would ask, based on tenant  
commentary? How does the city evaluate when to do that? Can tenants say they don't  
think 2019 was a good year for comparative purposes, I think you should provide us  
with 2020 data? When I have seen base year questions brought up, it has been in the  
context of exceptionally low rents having been collected in the base year or a lack of  
knowledge of what the rents were because there's been a transfer and property  
ownership and the books that were used in 2019 simply are not available to someone  
who acquired in 2020. So those are the 2 circumstances. I can think that's clear.  
Cole: Yeah, do think that is concerning that tenants can’t raise that, while the landlords  
are able to. I want to reiterate that the point that these are all self-reported expenses  
and at 32% increase in operating expenses in 2 years is extremely high. I just want to  
reiterate the concern that there is no oversight on these numbers that they are  
reporting. Again, there is some categories that we didn't report in 2019, that they're  
spending a lot of money and in 2021. And I think that then using those numbers as a  
basis for increasing our rents when there hasn't been any oversight in that process.  
Moermond: What I need to do is look at the math on that. You're in the 30% range for  
some of the items listed as expenses in the MNOI. I think I need to look at whether or  
not what's been produced without audit gets us to 8%, which was the maximum  
request made and whether or not an audit is justified to go even more deeply based on  
the comments that you are raising. In the past when I have done these, it usually  
takes me 2 or 3 weeks to come up with a letter to go out with my recommendation to  
the City Council. And as I indicated right out of the gates, this is a recommendation  
that I'm making. At the very worst, what we've done here today is to create a record.  
We've gotten the documents and comments on the record, the staff report and  
landlords’ information. It's all at least pulled together in one place so that the  
decision-makers have that information coming as their starting point. Again, I  
appreciate you coming in and engaging and this. I'm going to, if you do have more  
questions.  
Mumm: I have a question. During this period where you are looking deeper, making  
the recommendation, can our rents be raised during that period?  
Moermond: No. Any potential rent increase is stayed until a decision is made by the  
City Council, which is the final determination. Then state law requirements with respect  
to notification and so on to apply. A final determination on the application happens 45  
days to pass from the DSI determination being made, unless there is an appeal within  
those 45 days. Yes, Doctor Watkins  
Watkins: I want to emphasize that we’re spending this time we've met together. We're  
thinking of all these things because we really do enjoy living where we live, like we love  
living where we where we live. We all make a certain amount of money. And again, the  
raises are some things. We're doing this because we are really invested and the place  
that we live, and we want to stay where we live. And we’re just trying to see how we can  
do that. You know, with what we have in our bank account, you know, so that's what  
the bottom line is.  
Moermond: Yes, and I will say the financial and emotional investment that is being  
made by you and the residents there is what makes that area so vibrant.  
Cole: I want the record to reflect that the raises above 8% and raises between 3% and  
8% - that dichotomy is largely artificial from our tenant perspective. It's a 6% to 8%  
raise and a 17.5% raise. Well, although those are vastly different numbers, they both  
spell displacements for us. And so, I just want that to be on everyone's mind when  
they're deciding this case that it is not a magnanimity to spare us from the 17.5% in  
rent increase. If we are just going to get hit with a 6% or 8% increase. That is  
structural differentiation. That is codified into law. But structurally meaningless for us  
as living Saint Paul residents.  
Moermond: I am going to push back a little bit and definitions that we are using here.  
The ordinance talks about up to 3% being allowable without having to seek an  
exception. And then the difference between the 3% and up is one up procedure at the  
City, where 3% to 8% is mechanistically decided and then 8% plus is decided using a  
more thorough staff analysis. We now have the more thorough staff analysis on this  
3% to 8% requested increase and are going through the numbers. I hear your  
arguments about the issues of transparency between the 3% and 8% and how that  
gets turned around. And I know that the City administration talks about just the  
amount of staff that would take, a fleet of people that it would take to be able to do  
this. I think that the deal is that we wouldn't be here if it weren't an excess of 3%. That  
is a number that was selected when 3% was the average rent increase. But your point  
about the transparency is super. You know, I hear you. I have to go back and ask for  
these worksheets to be produced. They don't exist in city records. I can't pluck it off  
the shelf and neither can you. Now we can use that and do the analysis and produce  
that.  
Watkins: I think to the comment was about it doesn't matter if it's 8% or it could have  
been 11% or 13%. We cannot live there like we are being displaced. So that's just  
something to for. I think, if I may, I don't want to speak for you, but I think that is a  
large part of what you just said was that it doesn't matter if it's 11% or 13% or 8% we  
are out, you know….  
Moermond: Thank you. I really do appreciate what you said today. It's been very  
thought provoking and helpful. Okay, Ms. Evenson, if you do have comments, I want to  
welcome them right now. Is there anything that you wanted to say before we wrap up?  
We talked earlier any additional information at this point.  
Evenson: No, I don't have any.  
Moermond: Thank you, everyone for your time today.  
Deny the appeal.