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Santa Monica
City Council Meeting: April 14, 2009
.Agenda Item: ~~~
To: Mayor and City Council
From: Andy Agle, Director, Housing and Economic Development
Subject: Prevailing Wage Monitoring Contracts
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute two professional service agreements, in sum not to exceed $250,000, with
Comprehensive Housing Services, Inc. (CHS) and with AmeriNational Community
Services, Inc. (ACS) for federal/state prevailing wage monitoring and Section 3
compliance for various City-funded affordable housing developments and parking
structures.
Executive Summary
To ensure City compliance with local, state and federal prevailing wage regulations, the
City relies on experts to monitor construction wages for affordable housing and other
construction projects. Staff recommends that the City contract with two qualified firms,
Comprehensive .Housing Services and AmeriNational Community Services, Inc:, to
provide these services, in an amount not-to-exceed $250,000 for both contracts.
Background
From May 2009 through June 2010, several affordable housing developments and
parking structures .projects are expected to be under construction in Santa Monica.
These rehabilitation and new construction projects are funded with Redevelopment tax
increment, HOME funds, CDBG funds or a combination of these sources.
Local, state and federal regulations require that developments assisted with such funds
pay construction workers at established prevailing wage rates and comply with Section
3 labor requirements. The City of Santa Monica Municipal Code Section 7.28.030, the
"Applicability of Prevailing Wage Requirements", states that housing developments
financed in whole or in part by federal, state, or local funds shall comply with the
applicable federal or state prevailing wage requirements. The California Labor Code,
Section 1770, et. seq., and the federal Davis-Bacon Act require that projects assisted
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with state and federal funding pay workers prevailing wage rates established and issued
by the California Department of Industrial Relations, Division of Labor Statistics and
Research, or the U.S. Department of Labor, Wage and Hour Division. Section 3 of the
Housing and Urban Development Act of 1968 requires that programs of direct financial
assistance administered by the U.S. Department of Housing and Urban Development
(HUD) provide, to the greatest extent feasible, opportunities for job training and
employment to lower income and minority residents in connection with affordable
housing developments in their neighborhoods.
Potential ramifications for non-compliance include state and federal entities imposing
fines, requiring the City to fund payroll underpayment, and withdrawal of project funding
sources. To mitigate these risks on affordable housing and redevelopment-related
projects, the City-has hired firms that specialize in prevailing wage monitoring for at
least 10 years: CHS has held the contract for the past six years.
Discussion
The anticipated construction/rehabilitation projects are the result of recent City Council
initiatives to increase the supply of affordable housing and to improve the quality and
quantity of downtown parking. Eleven affordable housing projects are anticipated to be
under construction, including continued infrastructure improvements at Mountain View
Mobile Home Park, nine recently acquired apartment buildings slated for rehabilitation
by focal nonprofit developers, one affordable housing development currently in
construction; and two new affordable housing construction projects. Expected parking
construction projects include earthquake retrofitting of Parking Structure 2, fagade
upgrades to Parking Structures 7 and 8 and potential initiation of the first parking
structure reconstruction as part of the Downtown Parking Strategy. The construction
monitoring periods for these projects range from nine to twenty-four months from the
start of construction. Some projects may begin construction as late as June 2010 with
completion not occurring until FY2011-2012. Since funds are expended as construction
progresses it is anticipated that the amounts included in the contract will be spent over
approximately a three year period.
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Contractor/Consultant Selection
In November 2008, staff issued a Request for Proposals (RFP) for prevailing wage and
Section 3 monitoring services. Four responses were received. Staff reviewed and
evaluated the proposals based on criteria including firm staffing, experience,
qualifications, technical skills, fee schedule and references. The .staff committee
determined that CHS and ACS are the most qualified applicants. CHS and ACS bid at
reasonable rates, demonstrated expertise in the field and provided excellent references.
This report requests that Council authorize the City Manager to negotiate and execute
two professional service agreements for a total amount of $250,000 for the purpose of
prevailing wage and Section 3 monitoring. Hiring two firms assures that the high
volume of construction projects is adequately serviced and provides the City with the
opportunity to diversify its vendor relationships.
Financial Impacts & Budget Actions
Funds in the amount of $200,000 are available in account number 01264.555060 for the
affordable housing project portion of these contracts and funds in the amount of
$50,000 are available in account number 0170621.589000 for the parking garage
portion of these contracts.
Prepared by: Lisa Luboff, Senior Administrative Analyst
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Approved: Forwarded to Council: