SR 09-13-2011 3E~;~YOf City Council Report
Santa Afonica°'
City Council Meeting: September 13, 2011
Agenda Item: 3
To: Mayor and City Council
From: Andy Agle, Director of Housing and Economic Development
Subject: Property Management for City-Owned Residential Properties
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute an amendment to Contract No. 9183 with Real Estate Consulting & Services,
Inc. (RECS), aCalifornia-based company, in the amount of $205,124, for a total amount
not to exceed $1,630,864 for the 39-month contract period ending FY 2012-13. The
increased contract amount represents an expanded scope of property management
services for City-owned residential properties.
Executive Summary
The Housing Division oversees four City-owned residential rental properties located at:
419 Ocean Avenue, 1930 Stewart Street, 1616 Ocean Avenue, and 1122 22nd Street.
RECS currently provides property management services for the Mountain View Mobile
Home Park and has the capacity, expertise, local policy experience, and presence in
Santa Monica to improve service and provide greater efficiencies by managing all of the
Housing Division's properties. Property management responsibilities would include
occupancy, maintenance, record-keeping, and periodic reports to City staff: The
contract amount increase of $205,124 includes management fees, estimated operating
expenses, and a standard ten percent contingency fora 21-month period (October 2011
through June 2013).
Background
On March 8. 2011, the City Council approved the selection of Overland, Pacific & Cutler
(OPC), to provide property management services for 419 Ocean Avenue, 1616 Ocean
Avenue, and 1122 22nd Street. In May 2011, the City entered into a contract with OPC
to manage these three properties. Staff recommends that these responsibilities be
transferred to RECS, who also competed in the RFP process to manage the properties.
RECS is currently providing property management services at Mountain View Mobile
1
Home Park after successfully competing for the contract, which was approved by
Council at its March 9, 2010 meeting.
Discussion
Since April 2010, RECS has demonstrated expertise in the property management
discipline by providing timely, appropriate, and responsive service to tenants and
demonstrating familiarity with City regulations, professionalism, flexibility, and superior
customer service as the property management agent for the Mountain View Mobile
Home Park. Although OPC has met basic requirements and performance standards,
consolidating with RECS would provide better service to tenants, as well as conserve
the City's resources. Residents of all City-owned properties would benefit from having
property management staff physically located in Santa Monica seven days per week.
Currently, RECS' staff is on-site at Mountain View five days per week. The expansion of
RECS' scope of work would extend services to all four properties seven days per week.
Additionally, combining all City-owned residential property management services into a
single scope of work with one company enhances economies of scale and provides
continuity and consistency for staff and residents.
The scope of property management duties that RECS would assume include all of the
routine functions, such as: 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 services, including leasing and
resit collection. RECS' services will include staff to handle operational activities and to
oversee maintenance work, vendors, and inspections.
The proposed amended contract for property management includes a budget reflecting
all operational expenses for the properties and the property management services fee.
The existing contract with OPC for property management of 419 Ocean Avenue, 1616
Ocean Avenue and 1122 22nd Street will be terminated and the existing contract with
RECS will be modified to assume these responsibilities. The cost of services provided
by either vendor is similar, though staff anticipates that the City will experience a higher
2
level of service because of RECS' existing presence in Santa Monica. The contract with
OPC provides fora 10-day notice of termination and it is envisioned that RECS will
assume the additional responsibilities as of October 1, 2011,. with no overlap of
services.
Financial Impacts & Budget Actions
The contract amendment to be awarded to RECS is $205,124, for a new contract total
of $1,630,865. The amendment includes an increase of $87,910 for FY2011-12 and
$117,214 for FY2012-13. Funds for FY2011-12 are included in the FY2011-12 budget
at account 01264.533220. Budget authority for subsequent years will be requested in
each budget cycle for Council approval. Pursuant to the existing protocol for these
properties, the property manager will deposit rental income from 1122 22nd Street, 419
Ocean Avenue and 1616 Ocean Avenue into account number 01264.405330.
Prepared by: Barbara Collins, Housing Manager
Andy Agle, Director
Housing and Econo
Forwarded to Council:
e
Rod Gould ~ ~'
City Manager
3
Reference Amended
Contract No. 9138 (CCS)