SR-06-24-2014-3No City Council Report
City Sputa Bionics
City Council Meeting: June 24, 2014
Agenda Item: 3- N
To: Mayor and City Council
From: David Martin, Planning and Community Development Director
Subject: Agreement with HR &A Advisors, Inc. to Provide Additional Services
Regarding Financial Feasibility of Two Proposed New Development Fees
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute a third modification to a sole source Professional Services Agreement No. 9804
(CCS) with HR &A Advisors, Inc. (HR &A), a California -based company, in the amount of
$47,273, to conduct financial feasibility testing of two proposed new development fees.
This will result in a two -year amended contract with a new total amount not to exceed
$145,268 with future year funding contingent on Council approval and budget adoption.
Executive Summary
In 2012 HR &A was selected from a short list of economic consultants established from
a Request for Qualifications to complete a financial feasibility analysis for the proposed
Transportation Impact Fee (TIF). The City and HR &A entered into a Professional
Services Agreement in the amount of $24,975 for completion of these services.
A first modification in April 2013 increased the agreement by $32,900 resulting in a total
amount not to exceed $57,875 for related financial feasibility analyses associated with
the proposed Parks and Commercial Development/Affordable Housing Linkage
Fees. In September 2013, a second modification increased the amount of
compensation to allow HR &A to complete the analyses of the proposed Parks and
Commercial Development /Affordable Housing Linkage Fees.
Staff recommends extending the agreement with HR &A through June 30, 2015 and
modifying the scope to allow HR &A to examine additional prototypes for feasibility of
two proposed new development fees. This third modification would increase the
contract amount by $47,273 resulting in a total agreement amount not to exceed
$145,268.
Background
On September 8, 2009, Council directed staff to pursue the creation of an open space
linkage fee on new development to achieve the open space and parks and recreation
goals set forth in the LUCE. On December 11, 2012, Council directed staff to establish
an affordable housing linkage fee for new commercial development. In accordance
with the State Mitigation Fee Act (A131600 et seq.), the City prepared draft nexus
studies for these two possible fees for upcoming consideration by the Council. In
December, 2012, the City and HR &A entered into a Professional Services Agreement in
the amount of $24,975 for financial feasibility analysis of the proposed TIF. In April,
2013, the original agreement was modified in the amount of $32,900 to include related
financial feasibility analyses associated with the proposed Parks and Commercial
Development /Affordable Housing Linkage Fees. On September 24, 2013, Council
approved a second modification with HR &A in the amount of $40,120, increasing the
total contract amount to $97,995. The second modification allowed HR &A to complete
the financial feasibility analysis related to proposed Parks and Commercial
Development /Affordable Housing Linkage Fees.
Discussion
The scope of the proposed third modification is a continuation of the feasibility analyses
that HR &A has been undertaking for the Housing Nexus Study and Parks Nexus Study.
HR &A will build upon this work and examine additional prototypes for feasibility of two
proposed new development fees. The proposed third modification would increase the
contract amount by $47,273 bringing the total contract amount to $145,268. The
proposed scope would include the following tasks:
K
• Work with staff to define four hypothetical building developments based on
development standards provided in various zones. The size and mix of
uses in these hypothetical prototypes will be the basis for the feasibility
analysis. This will include typical building types for Tier 1 and Tier 2
projects in multiple land use designations such as the Mixed -Use
Boulevard Low and General Commercial zones;
• Run hypothetical developments through an economic model to determine
financial feasibility for each of the four new prototypes;
• Update the previous Tier 1 and Tier 2 prototypes analyses to account for
the current Tier 2 requirements strategy which proposes increased
obligations for Open Space, Housing Linkage, and Transportation Impact
Fees (TIF) and requirements for increased onsite affordable housing;
• Prepare a summary of results;
• Prepare additional analysis or refinements, as necessary;
• Prepare a memorandum report summarizing the modeling results for all
ten Tier 1 and Tier 2 hypothetical prototypes (original six plus four new
prototypes);
• Review the draft report with City staff and revise if needed;
• Participate in one additional Planning Commission hearing; and
• Participate in up to two City Council hearings.
Contractor /Consultant Selection
In December, 2012, HR &A was selected pursuant to SMMC section 2.24.073, which
authorized a sole source agreement due to the specialized nature of the services
needed. HR &A has over 30 years of experience in economic development and market
analysis. Subsequent modifications to the original agreement resulted in a contract
amount exceeding $80,000, requiring City Council approval. HR &A was selected from a
short list of economic consultants established from a Request for Qualifications (RFQ)
process to complete the financial feasibility analysis for the proposed Transportation
Impact Fee (TIF).
3
Financial Impacts & Budget Actions
The contract modification to be awarded to HR &A is $47,273, for a new contract total of
$145,268. Funds are included in the FY 2013 -14 budget in divisions 01264, 01266, and
01501. The contract will be charged to the following accounts:
01264.555060:
$8637
01266.555060:
$30,000
S010400.589000:
8636
Total:
$47,273
Prepared by: Denise Smith, Executive Administrative Assistant
Approved:
David Martin , Director
Planning and Community Development
0
Forwarded to Council:
Rod Gould
City Manager
Reference:
Modification to Agreement
No. 9804
(CCS)