SR-121796-6F
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Contract 6581 (eCS) - ~
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Council Meeting December 17, 1996 Santa MOnica, California
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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
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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,
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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.
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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)
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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
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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
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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
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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
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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
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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
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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.
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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
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