SR-06-10-2014-3JCity Council Meeting: June 10, 2014
Agenda Item: ® ®J_
To: Mayor and City Council
From: Andy Agle, Director of Housing and Economic Development
Subject: Prevailing Wage Monitoring for Affordable Housing Construction
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute a sixth modification to Professional Services Agreement #9052 in the amount of
$54,000 with Comprehensive Housing Services, Inc., (CHS), a California -based
company, to provide federal and state prevailing wage monitoring and Section 3
compliance for City- funded affordable housing developments. This will result in a
seven -year amended contract with a new total amount not to exceed $567,000
contingent on Council budget approval for future -year funding.
Executive Summary
To ensure City compliance with local, state, and federal prevailing wage regulations, the
City relies on experts to monitor wages paid to construction workers on affordable
housing developments. CHS is currently providing these services for three affordable
housing developments, in various stages of construction. Staff recommends amending
the existing contract to ensure that CHS continues to provide the monitoring services.
This action would increase the total not -to- exceed contract amount from $513,000 to
$567,000.
Background
In April 2009, June 2011, June 2012 and March 2013, the Council authorized the
current contract (original contract and amendments) with CHS. The contract budget for
monitoring construction of affordable housing developments requires additional funds in
the amount of $54,000 to continue providing prevailing wage monitoring through June
2016, when the pipeline of affordable housing developments currently underway will be
completed. Staff does not anticipate needing these services after June 2016, but if that
scenario changes a new competitive bid process will be undertaken.
1
Discussion
An increase of the existing contract with CHS is recommended to ensure continuity in
the monitoring of current affordable housing developments. CHS has been providing
prevailing wage monitoring services for several affordable housing developments
(totaling 459 apartments) that were in various stages of construction during FY 2013 -14.
While most developments have been completed, one development recently started
construction and two additional developments were just completed but require several
months of close -out monitoring activities. These developments are funded with various
local, state, and federal monies that require the payment of prevailing wages and, to the
greatest extent feasible, the provision of opportunities for job training and employment
to lower- income and minority residents. The applicable regulations are City of Santa
Monica Municipal Code Section 7.28.030, the California Labor Code, Section 1770, et.
seq., the federal Davis -Bacon Act and Section 3 of the United States Housing and
Urban Development Act of 1968. By June 2016, all of the affordable housing
development from the redevelopment- funded legacy will be completed.
Potential ramifications for non - compliance of prevailing wage monitoring and Section 3
compliance include fines, requiring the City to make payments to construction workers
to rectify underpayments, and withdrawal of project funding. To ensure compliance by
affordable housing developments, the City contracts with firms who specialize in
prevailing wage monitoring and Section 3 compliance.
Contractor Selection
At the end of 2008„ CHS participated in a Request for Proposals process for prevailing
wage and Section 3 monitoring services. Staff determined that CHS was one of two
best bidders and awarded a contract during 2009. More recently, in March 2011, staff
again issued a Request for Proposals (RFP) for prevailing wage and Section 3
monitoring services. Five responses were received. Staff reviewed and evaluated the
proposals based on criteria including capacity, experience, qualifications, technical
skills, fee schedule and references. The staff committee determined that CHS was the
most qualified and the best bidder at that time. At this time, increasing the existing
2
professional service agreement with CHS by $54,000 for prevailing wage and Section 3
monitoring would allow for continuity in the delivery of these services through the
completion of all current affordable housing developments.
Financial Impacts & Budget Actions
The contract modification to be awarded to CHS is $54,000, for an amended contract
total not to exceed $567,000. Funds in the amount of $36,000 are included in the
proposed FY 2014 -15 budget at account 01264.555060. Continuation of the contract in
FY 2015 -16 is contingent on Council budget approval.
Prepared by: James Kemper, Housing Administrator
Approved:
Andy Agle, Director --�
Housing and Economic Development
Forwarded to Council:
3
Rod Gould
City Manager