SR-06-11-2013-3CCity of
City Council Report
Santa Monica'
City Council Meeting: June 11, 2013
Agenda Item: 3
To: Mayor and City Council
From: Andy Agle, Director of Housing and Economic Development
Subject: Third Modification of Property Management Contract with RECS
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute a third modification to Contract #9183 in the amount of $916,850 with Real
Estate Consulting and Services, Inc. (RECS), a California -based company, to provide
property management services at City -owned residential properties through June 2015.
This will result in a two -year extension for a new five -year amended contract with a total
amount not to exceed $2,547,714. Future year funding would be contingent on Council
budget approval.
Executive Summary
The Housing Division oversees property management for four City -owned residential
rental properties consisting of 26 apartments in two developments, a 105 -space mobile
home park and a single - family dwelling. As the contracted property manager, RECS's
responsibilities include overseeing occupancy, property maintenance, record - keeping,
and periodic reports to City staff. Staff recommends extending the RECS contract for an
additional two years to provide consistent property management until potential
disposition of City -owned residential properties occurs. The increased contract amount
of $916,850 includes management fees, estimated operating expenses for a 24 -month
period (FY 2013 -15) and a standard ten percent contingency.
Background
On September 13 2011, City Council approved staff's recommendation to consolidate
property management services with RECS for all City -owned properties including
419 Ocean Avenue, 1616 Ocean Avenue, and 1122 22nd Street. The current contract
expires on June 30, 2013.
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Discussion
The scope of property management duties that RECS currently performs covers all
necessary 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 responsibilities,
including leasing and rent collection.
RECS has provided property management services for City -owned property for three
years and has performed well, demonstrating expertise in the field, familiarity with City
rental regulations, and professionalism in their communications with residents.
Additionally, staff recognizes that residents benefit from having a property management
provider with a local presence throughout the workweek, as well as on the weekend.
As directed by Council, over the next two years, staff will explore ways to transition
City -owned residential properties to private or nonprofit owners while safeguarding the
existing tenants from displacement. Therefore, staff recommends extending the
existing property management contract with RECS for an additional two years. This
approach will allow continuity of services during this transition period. The extension for
24 months, in addition to the initial 39 -month contract, will result in a modified 63 -month
contract, slightly exceeding five years. Staff recommends extending the contract by
24 months to be consistent with the City's FY 2013 -15 biennial budget period and to
ensure continuous property management during the disposition transition period.
Consultant Selection
On October 19, 2009, a Request for Proposals (RFP) was issued to solicit proposals to
provide property management services for the Mountain View Mobile Home Park.
The RFP was sent to 20 property management firms and was posted on the City's
website. Three proposals were received and reviewed by a staff selection committee.
Two were selected for further review and interviewed by staff. Additional discussions
and reference checks followed. Staff recommended Real Estate Consulting and
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Services, Inc. (RECS) as the best firm to provide property management services at the
Mountain View Mobile Home Park. RECS demonstrated expertise in the field,
professionalism in their written and oral communication, excellent references, and
competitive pricing. The professional services agreement with RECS was approved by
City Council on March 9, 2010.
Financial Impacts & Budget Actions
The contract modification to be awarded to RECS is $916,850 for an amended contract
total not to exceed $2,547,714. Funds are available in the proposed FY 2013 -14 and
FY 2014 -15 budgets in division 01264; the contract will be charged to account
01264.533220 in the amount of $482,350 in FY 2013 -14 and $434,500 in FY 2014 -15,
pending Council adoption of the proposed FY 2014 -15 budget.
Prepared by: Jim Kemper, Housing Administrator
Approved: Forwarded to Council:
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Andy Agle, Director Rod Gould
Housing and Economic Development City Manager
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Reference Contract No.
9183 (CCS)