City of Hayward Spanish Ranch I Proposed Rent Increase:

Meet and Confer Meeting #1 Notes

Tuesday, October 14, 2008
Hayward City Attorney’s Office
Hayward, CA

Call to order
Michael Lawson, Hayward City Attorney, called the meet and confer process to
order at 7:30 pm. The meeting was delayed by a half hour due to a
misunderstanding of the meeting location by the ownership team. This
proceeding has been scheduled in response to a requirement outlined in the
City’s Ordinance regarding rent disputes between Spanish Ranch I tenants and
the landowner, Rutherford Investments.

Introduction of City facilitators and staff

Lou Hexter of MIG, Inc. (MIG) welcomed members of the group and introduced
himself and the other two members of the facilitation team, City Attorney Michael
Lawson and Nicole Lewis (MIG).

Mr. Hexter will serve as lead facilitator. Mr. Lawson will provide his legal
expertise and perspective to support the process, and Ms. Lewis will keep record
of key points of discussion and significant process outcomes.

Approval of the agenda

Mr. Hexter reminded the group that the intent of the evening was not to resolve
the issue before us. Rather, the purpose of the meeting was to review, discuss
and agree upon the group charge, ground rules for participation and operating
procedures, and to determine the schedule for subsequent meetings. These
discussions are important to ensure that all participants proceed in step as the
meet and confer process moves forward.

Mr. Hexter reviewed the Meeting #1 agenda with the group and requested
approval of the agenda shown by a nod of heads. All participants approved.

Introduction of SRI ownership group negotiation committee

• Patrick Mockler: Managing Partner at Rutherford Investments and has

been working with the company for seven years.

• Ryan Franklin: Director of Operations for the Mobile Home Park Division.

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 • Don Urie: Senior Partner at R&D Management and works with the
company’s Mobile Home Park Division.

Introduction of SRI HOA negotiation committee

• Norma Moore: President of the HOA and Secretary of Hayward

Mobilehome Owners Association (HMOA).

• Marisa Leasure: Secretary of HOA and SRI resident since 2001.

• Kathryn Morris: President of HMOA.

• Rey Abaya: Member of HOA Board of Directors and SRI resident.

• Fran La Torre: HOA member-at-large and SRI resident since 1993.

• Mary Dimsdale: Vice President of HOA and SRI resident since 1994.

• Jerry Abbott: Member of HOA Board of Directors since May 2008 and SRI
resident since 1999.

• Suzanne Hicks: Treasurer of HOA Board of Directors and SRI resident for
past 14 years.

Discussion of meet and confer process

Mr. Lawson provided an overview of the meet-and-confer process, as outlined by
City ordinance.

This meet and confer process has been initiated following the proposal for a rent
increase for month-to-month residents at Spanish Ranch I Mobilehome Park. The
proposed rent increase, effective October 1, 2008, is related to re-assessment of
the property taxes triggered by purchase of the park in 2007.

The intent of the meet and confer process is to allow both parties the opportunity
to put aside their legal arguments and meet with the purpose of coming to
agreement on the issue. Both parties are expected to participate in good faith
and to put forth their best effort to reach a mutually agreed upon resolution.

This meet and confer is the best opportunity to talk through the issues to reach
some kind of resolution. Lawyers representing one side or another are
discouraged from attending. The goal of this process is to reach a resolution after
three or four meetings that is reduced to writing and which will then be presented
to park residents.

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If parties do not reach a mutually agreed upon resolution, then there will be a
formal administrative hearing led by a hearing officer (a retired judge). At this
evidentiary hearing, the hearing officer will hear formal arguments and evidence
from both sides to compile an administrative record, which will inform the officer’s
written decision, which would become final unless appealed to Alameda County
Superior Court per Code of Civil Procedure Section 1094.5.

Don Urie asked, “How do we know once the agreement is in writing that the
residents will accept it?” Mr. Lawson responded by stating that the hope here is
that residents serving on the negotiating committee have the authority to come to
a conclusion and will take the agreement before affected residents for their
successful ratification.

Mr. Lawson concluded his overview by stating that parties to the meet and confer
processes that the City has facilitated in the past five to six years have all
reached agreement. He is hopeful and optimistic that the parties here today will
reach agreement that results in their mutual satisfaction.

Discussion of group principles and desirable outcomes

Ground Rules for Participation and Operating Procedures. Mr. Hexter
reviewed the Ground Rules for Participation and Operating Procedures for this
process, which the facilitation group provided to both negotiating groups during
initial meetings. The ground rules and operating procedures are intended to
direct participation in a way that is productive and focuses on the issue at hand.

As with similar processes, this also represents an important opportunity to

establish good communication between the two parties. Participants are invited
to voice concerns related to past communications to the extent that doing so is
important or relevant to resolution of the conflict surrounding the proposed rent
increase.

The HOA negotiating committee provided a proposed set of revised Operating

Procedures in print for the group to review and discuss. An updated set of
Ground rules and Operating Procedures based on meeting discussion are
attached.

Audio-Recording Sessions. The HOA requested that the Meet and Confer
sessions be either videotaped or audio taped to provide a literal record of the
meetings that would be available to interested, affected parties. Mr. Mockler
agreed to audio taping of the sessions provided that an objective, written
summary of each meeting would be available also. Ms. Hicks agreed to provide
an audio-recording device for making recordings for use by the HOA The
ownership group may decide to make recordings of the meetings for its own use.

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Mr. Lawson expressed concern with the idea of audio recording the sessions. He
argued that doing so could change the way people talk and express themselves,
and audio tapes may not fairly reflect the emotions driving negotiation.

In Mr. Lawson’s opinion, the facilitator’s report will probably provide the most
objective documentation of the sessions. He also warned that audio-taping
selected caucus sessions may make it look as if the group is manipulating the
record of discussion and decision-making among the group, which may in fact
work against achieving the transparency the group desires.

Endorsement of written summaries. Comments related to written meeting

summaries will be sent through one person from each negotiating committee.
Ms. Moore or Ms. La Torre will provide HOA’s condensed comments, and Mr.
Mockler will send comments on behalf of the ownership group. Both groups
agreed to return comments in a timely fashion.

Distribution of written summaries. The ownership group agreed to distribute

written summaries of the meet and confer session to the affected residents.
Summaries will also be posted on the community bulletin board located on site at
Spanish Ranch I Mobilehome Park.

Communications with outside parties. During discussion of ground rules and

operating procedures, conversation ensued related to a second group of SRI
residents who have made numerous efforts to contact Mr. Mockler and engage
him in discussion related to this process. According to Mr. Mockler, these
residents have expressed discomfort with the HOA Board’s ability to negotiate on
behalf of them.

Mr. Mockler has assured this second group of residents that this is a transparent
process, and has asked them to give this process a chance and have faith in the
Board’s ability to come to a resolution that they would be amenable to.

Both the facilitation group and the ownership group expressed that the success
of this process relies on the fact that the HOA Board of Directors represents all
affected residents. Mr. Mockler assured the HOA Board that he does not plan to
engage this second group in communications related to the proposed rent
increase. At the same time, he cannot control who sends him email messages
related to the subject. Mr. Mockler has agreed to draft and send a standard
response to groups or individuals who continue to do so.

Discussion of timetable and meeting schedule

Mr. Hexter provided an overview of the remainder of the meet and confer
process. Both negotiating committees agreed that this process provides room to
achieve what they hope in working towards a resolution.

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Meeting #1 was intended to lay the groundwork for the process by agreeing to
the ground rules and operating procedures, and establishing a schedule for
subsequent meetings.

Meeting #2 will be dedicated to identifying and exploring the issues. To begin this
meeting, each group will have 5 minutes to give an opening statement to begin
identifying the issues requiring resolution. Following each statement the other
party will have the opportunity to ask questions and request clarification. During
this session, participants will also begin to explore options. This includes an
exploration of ideas, constraints and desires of both negotiating committees.

Meeting #3 will be dedicated to working towards an agreement. The facilitation

team’s goal for this session is to support both parties in reaching a mutually
agreeable resolution of the issue in the form of written agreement.

Throughout the process, both negotiating committees are encouraged to caucus

provided that the intent of doing so is to advance the process in a productive
way. Caucusing is not intended to serve as a delay tactic.

Representatives from the three groups have agreed to meet on the following
dates and times:
• Wednesday, October 29, 2008 from 7-9pm
• Wednesday, November 5, 2008 from 7-9pm
• Wednesday, November 12, 2008 from 7-9pm (if needed)

All subsequent sessions will be held at the City Attorney’s office located at:

Hayward City Hall

777 B. Street, 4th Floor
Hayward, CA 94541

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