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SR-121796-6F )F ::rl Contract 6581 (eCS) - ~ .- JM RM HOUSING JG TR .. Council Meeting December 17, 1996 Santa MOnica, California DEe 1 7 1196 TO Santa Monica City Council FROM City Staff SUBJECT Recommendation to Authorize City Manager to Negotiate and Execute a Contract wIth Wllldan Associates to Implement a Low Income Residential Repair Program on a Pilot Project BasIs INTRODUCTION This report recommends that the City CounCil authonze the City Manager to negotiate and execute and contract with Wllldan Associates to Implement the proposed Low Income Residential Repair Program on a pilot project baSIS BACKGROUND Since 1984, the City has funded the PICO Neighborhood Residential Rehabilitation Program utiliZing Federal Community Development Block Grant (CDBG) funds ThiS program served 70-80 Units annually In the PICO Neighborhood and prOVided grant subsidies of between $2,000 and $3,000 per unit for eligible reSidential repairs, Including but not limited to painting. carpeting, carpentry, electrical repairs, plumbing, roofing, and heating Since February 1996, the City has contracted With Wllldan ASSOCiates to continue administering the program on an Interim baSIS while conducting an evaluation of the program DEe 1 7 .. 1 6FfI << . This staff report summarizes the results of the program evaluation, outlines staffs recommendation for a new program, and requests Council authorization to execute a contract to begin the new program on a pIlot project basIs Program Evaluation The scope of the program evaluation was to 1) assess the nature and extent of housing rehabilitation needs In the study area; 2) reevaluate the program In light of changing community needs, and, 3) reexamine alternative programmatic approaches, If necessary, to more effectively meet these needs The study area Induded census tracts 7017 02, 701 B 01, 7018 02, and 7019, including the PICO Neighborhood and the City's downtown These census tracts contain a majority of lOW-income households A copy of the final program evaluation IS contained In Attachment A Among the key findings of the program evaluation are the following 0 51 2 percent of the Study area's hOUSing Units were bUilt pnor to 1960 This means that many structural and mechanical systems In these buildings such as roofing and plumbing are at the age where they Will need repair or replacement, 2 - 0 25 7 percent of the households In the study area are overcrowded (that is, have more than one person per room), which accelerates wear and tear on housing, 0 A majonty of dwelling Units (667 percent) In the study area are In bUildings containing five or more units This IS significant because, under the former program gUidelines, bUildings with eight or more Units were excluded from the program due to higher costs associated with federal Davis-Bacon prevailing wage requirements This meant that a significant share of bUildings In the target area could not take advantage of the rehabilitation program Among the salient comments about the program gathered from community meetings and a survey of past program users were the following 0 the program provides a valuable service to the community and should be continued, 0 program SUbSidies should be Increased to cover moderate rehabilitation Items such as roofing and plumbing systems, 0 secunty Improvements should be funded, especially for seniors, 0 quality of work performed should be more closely mOnitored. 3 The final program evaluation also recommends that the program be modified to allow larger per Unit grants for repairs In order to enable the repair of major bUilding systems, such as roofing and plumbing Current Proaram Status (Februarv 1996 - November 1996) - . Since February, Wllldan Associates has provided Interim services under two separate, short-term purchase orders to operate the rehabilitation program dUring the transItion perIod to a new program DUring FY 95/96 the Purchase Order amount was $49,960 and dUring FY 96197 the Purchase Order amount was $48,212 Since February, services have been prOVided for repairs to 32 Units, With an average per Unit subSidy of $1,905 It IS anticipated that a total of 35 umts Will be served under thiS interim program ProDosed Pilot Proaram Given the limited funding of the program, staff recommends that the program be redeSigned to Include three components 1) lead based paint testing and remediation targeted to Section 8 households With children SIX and under; 2) home security Improvements, and, 3) moderate rehabilitation These three program components are described In greater detail In Attachment B Staff proposes thiS be a pilot program since It IS the first time that the City has proactlvely attempted to address lead paint remediation as well as the first time that the Housing DIVISion and Police Department Will work together cooperatively on the Issue of home security Other proposed major changes to the program dUring FY 96/97 Include the follOWing 4 0 Increasing the per unit subsidy from $2,000 to $4,000 to enable the program to address larger bUilding systems (such as roofing and plumbing), 0 RepaIring bUIldings wIth more than seven Units; 0 Expanding the program citYWide to quahfylng low-Income homeowners and properties with a majority of low-income tenants, and, 0 Incorporating an employment training program for local, low-Income residents Soeclal Proaram Features . - If the City Council approves thiS approach, the first task reqUired of Wllldan Associates Will be to prepare program gUidelines, which Will address a vanety of program parameters such as ellglblhty requirements and eligible program activities These gUidelines Will also address special features of the program such as matching grants, employment training for local reSidents, and incentives for property owners to participate In the lead-based paint component of the program In broad terms, these features are described below Matching Grants The recommended Pilot Program Will Include a prOVIsion for matching grants In Instances where SubSidies exceed a certain minimum threshold, such as $1,000 per Unit At the discretion of City staff and Within the program gUldehnes established by the City, property owners uSing matching grants may be given the authority to choose the contractors 5 Section 8 Commitments In exchange for a full grant for lead-based paint testing and remediation, property owners Will be required to enter Into an agreement with the City committing to rent to Section 8 tenants for a specified penod of tIme, dependmg upon the amount of the grant For example, a grant of $2,000 would require a two-year Section 8 commitment, $3,000 a three-year Section 8 commitment, and so on As an alternative to such an agreement, property owners may Instead be able to apply for matching grants for lead-based paint testing and remediation Employment Training Staff IS explonng the feaslbtllty for coordmatlng with local non-profit employment organizations to craft an employment training component of the program for underprivileged Santa Monica youth Lead-basec/ Paint Seminars In addition to providing SubSidies for testing and remediation, staff IS also proposing to conduct educational seminars for property owners on lead-based pamt hazards and methods for managing and remedlatlng these hazards Since some of the Immedtate dangers of lead-based paint can be managed through relatively Simple and cost-effective methods, staff beheves that these educational seminars would be a valuable service to the community 6 PROGRAM SAFEGUARDS In order to ensure that all applicable federal accounting regulations are followed, as well as to ensure the most cost~ffectlve use of program funds, the program WIll Incorporate several accounting safeguards In particular, the City wIll require that the program operator 0 Provide the City with a copy of the organization's last completed audit pnor to executing a contract to operate the program, 0 Undergo an annual Independent audit, paid for by the agency, 0 Maintain accounting records according to all applicable Office of Management and Budget (OMB) gUidelines, 0 Maintain accounting records which reflect all administrative and capital expenses associated with the repair of each umt; and, o Venfy through accounting records that the costs of program administratIon do not exceed more than 20% of the total program expenditures PROGRAM BUDGET CDBG funds available to Implement the new program for FY 96/97 are as follows FY 95/96 Unexpended $126,826 FY 96/97 Budgeted $325.348 FY96/97 Total Available $452,174 Until the new program IS marketed, It Will not be poSSible to know the exact demand for the program's various components However, the breakdown below presents staff's preliminary estimate of the budget allocation for the program's three components and 7 -- - - --- ---- Indicates the number of Units that could be served by each component, assuming the average per umt subsidy amounts shown Program Budget Budget Alloc less Avg Per Estimated Comoonent AllocatIon 20% Admin Costs. Unit SubsIdy Units Served Home Secunty $ 60,000 $48,000 $ 250 192 Lead Based paint $300,000 $240,000 $3,000 80 Other $ 92.174 $73.739 $4.000 ...1e TOTALS $452,174 $361,739 N/A 290 Due to the availabIlity of one-time funds from savings dunng FY 95/96, the number of units served under this pilot program will be greater than the number of units served In future fiscal years Staff Intends to conduct targeted marketing of the program's components to achIeve the allocation reflected above However, In the event that the demand for program funds shifts strongly toward certain program components, staff WIll have the flexibility to re-allocate funds to other program components CONSUL TANT SELECTION In selecting a program operator for this program, staff consulted WIth rehabilitation speCIalists In nelghbonng localities and assembled a list of eight firms and organizations thought to have the appropnate capacIty and expertise to receive copIes of the Request for Proposals (RFP) A display ad was also published In the Outlook announcing availability of the RFP Proposals were received from three firms, Including Affordable HOUSing ProfeSSIonals, ComprehenSIve HOUSing ServIces, and, Wllldan ASSOCIates Interviews were conducted With all three firms 8 - Staff recommends Willdan Associates for a number of reasons, the most Important of which are the firm's depth and breadth of expenence In admlnlstenng CDBG programs; the extensive background of the project manager In admlnlstenng similar repair programs, the firm's strong track record with other clients, and finally, the strong qualifications and expertise of the lead-based paint subconsultants being used by Wllldan Staff proposes to assess the new program at the beginning of FY 97/98 If the new program IS effective In addressing home secunty and lead-based paint concerns, staff will return to City CounCil With a recommendation to extend the contract With Wllldan to utilize the FY 97/98 budget allocation to continue operating the program through the end of FY 97/98 FINANCIAL IMPACT ThiS program IS funded entirely through HUD Community Development Block Grant Funds Therefore, there IS no fiscal Impact on the City Funds are currently budgeted In the amount of $452,174 and are available In the following account 01-620-264-76030-7215-00000 RECOMMENDATION Staff recommends that the City CounCil authonze the City Manager to negotiate and execute a contract In the amount of $452,174 With Wllldan ASSOCiates to develop and Implement the City's Pilot low Income ReSidential Repair Program. 9 - Attachment A Residential Rehabilitation Program Assessment and Evaluation, November 1996 Attachment B Description of Three Proposed Program Components Prepared by Jeff MathIeu, Resource Management DIrector Barbara Stinchfield, Acting Community and Cultural Services Director Bob Moncrief, Housing Manager Tad Read, Semor Development Analyst F \HOUSING\SHARE\WPFlLES\REHAB\CCPRGAPP WPD 10 ~