sr-030811-3c (2)City of{ Itj/ FA® ®II
~aIIyB MOlC1CaW
City Council Meeting: March. 8, 2011
Agenda Item: 3~~
To: Mayor and City Council
From: Andy Agle, birector of Housing and Economic Development
Subject: Property Management for City-Owned Affordable Housing Properties
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute a contract with Overland, Pacific & Cutler, Inc. (OPC), a Long Beach-based
company, for a total amount not to exceed $143,236 over a 15-month period to provide
property management services, including contracting for and paying all operating costs,
for City-owned affordable housing properties located at 1616 Ocean Avenue, 419
Ocean Avenue and 1122 22nd Street.
Executive Summary
The Housing Division oversees property management for three City-owned affordable
housing properties consisting of 27 residences. In October 2010, staff issued a
Request for Proposals for property management of these sites and OPC is
recommended to provide these services based upon their experience, references and
competitive pricing. OPC's responsibilities will include occupancy, property
maintenance, record-keeping, and periodic reports to City staff. The contract amount of
$143,236 includes management fees, estimated operating expenses fora 15-month
period (April 2011 through June 2012) and a standard ten percent (10%) contingency.
Background
The City owns three affordable housing properties at 1616 Ocean Avenue, 419 Ocean
Avenue and 1122 22"d Street. The majority of units at these properties are occupied by
special needs tenants. Sullivan Dituri Realtors has provided traditional property
management services for these properties for many years.
1
Discussion
Staff has determined that future operation of these sites will benefit from a property
manager that has greater expertise in assisting special needs residents and in
temporary tenant relocation. In particular, the upcoming rehabilitation of 1616 Ocean
Avenue may require specialized knowledge, services and experience regarding federal,
state and local housing laws. In addition to these specific needs, the scope of property
management duties will cover all of the routine functions, including: handling day-to-day
operations; supervision and coordination of maintenance and repair contracts; payment.
of all operating expenses such as utilities, maintenance, repairs and fees; and
occupancy including leasing and rent collection. OPC's staffing will include a Property
Management Supervisor to handle operational activities and a Property Maintenance
Supervisor to oversee maintenance workers, vendors and inspections.
Contractor Selection
On October 15, 2010, a Request for Proposals (RFP) was issued to solicit proposals to
provide Property Management Services for these City-owned properties. The RFP was
sent to 18 property management firms, posted on the Housing Division's web-site and
listed on the City's contractor website Planet Bids. Five proposals were received, three
of which were deemed complete and reviewed by a Selection Committee comprised of
City staff and representatives from -two Santa Monica-based nonprofit affordable
housing providers. Reference checks were conducted with clients of the three firms,
including officials who oversee property management of affordable properties at other
Southern California cities and the County of Los Angeles:
Staff recommends OPC as the most qualified firm to provide property management
services for these three .City-owned affordable housing properties. OPC has
demonstrated expertise in the field, including specialized knowledge .and experience
with special needs tenants and relocation services, professionalism in their written and
oral communication, excellent references, and competitive pricing.
2
Financial Impacts & Budget Actions
The proposed contract for property management includes a budget reflecting all
operational expenses for the properties and -the property management services fee.
The proposed contract budget is shown below:
Contract period Total
April 1, 2011
through;
June 3Q 2011 July 1, 2031
through
June 30 2012
TOTAL
.Management Fees $13,350 $42,000: $55,350:
Operating Expenses $15,088 $59,776 $74,865
Sub-Total $28,438 $101,776'. $130,215:
10% Contingency $2,844 $10,178 $13,021
TOTAL $31,282 $111,954 ', $143,236
The contract to be awarded to OPC is $143,236. The majority of the total contract
($74,865) is for operating expenses, $55,350 is for property management fees, and the
balance represents a ten percent (10%) contingency ($13,021). Funding for the first
three months of the contract period are available in the FY10/11 budget at account
number 01264.533220, and the funds for the remaining twelve months are contingent
on Council approval of the FY 11-12 budget. Pursuant to the existing protocol for these
properties, the property manager will deposit rental income in account number
01264.405330.
Prepared by: Lisa Luboff, Senior Development Analyst
Approved:
~~
Andy Agle, Director
Housing and Economic Development.
Forwarded to Council:
Rod Gould
City Manager
3
Reference Contract No.
9343 (CCS).