SR-04-28-2015-3FCity Council Report
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City Council Regular Meeting: April 28, 2015
Agenda Item: 3 -�
To: Mayor and City Council
From: Andy Agle, Director of Housing and Economic Development
Subject: Fourth Modification of Property Management Contract with Real Estate
Consulting Services, Inc.
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute a fourth modification to contract #9183 in the amount of $701,357, including a
ten percent contingency, with Real Estate Consulting and Services, Inc. (RECS), a
California -based company, to provide property management services at City -owned
residential properties through December 2016. This will result in an eighty -one month
amended contract with a new total contract amount not to exceed $3,249,071, with
future -year funding contingent on Council budget approval.
Executive Summary
The Housing Division oversees property management for City -owned residential rental
properties consisting of 26 apartments in two developments and Mountain View Mobile
Home Park, comprised of 105 rental spaces for manufactured homes. 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 eighteen months to provide consistent
property management until anticipated disposition of City owned residential
properties occurs. The increased contract amount of $701,357 includes management
fees, estimated operating expenses for an eighteen -month period, and a standard ten
percent contingency.
Background
On September 13, 2011, Council approved a second modification, consolidating
property management services with RECS for all City -owned residential properties.
On June 11, 2013, Council approved the third modification to the property management
contract with RECS, which expires on June 30, 2015. Additionally, on July 22, 2014,
Council authorized the issuance of a Request for Proposal (RFP) to solicit proposals
from nonprofit affordable housing organizations to acquire the occupied, City -owned
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apartment buildings at 419 Ocean Avenue and 1616 Ocean Avenue in order to operate
the properties as affordable housing.
Vendor /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 and two firms were
interviewed. Staff recommended 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 Council on March 9, 2010. Additionally, on September 13, 2011,
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.
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; occupancy responsibilities, including
leasing and rent collection. City's Housing staff provides direct oversight of RECS to
ensure effective and efficient management of the City properties, including conferring
with RECS weekly and reviewing monthly status reports.
RECS has provided property management services for City -owned property for five
years and has performed well, demonstrating expertise in the field, familiarity with City
rental regulations, and professionalism in their communications with residents. Staff
recognizes that residents benefit from having a property management provider with a
local presence throughout the week. Therefore, RECS staffs an office on site at
Mountain View seven days a week (full -time during weekdays and part-time on the
r.
weekends).
Pursuant to Council direction on December 11, 2012, staff engaged in the disposition of
City -owned residential properties, which are in various stages of transition from
City- ownership. The property on 1122 22nd Street, which was part of the original
contract, sold on December 2013. Transition of the 419 and 1616 Ocean Avenue
properties from City- ownership to ownership by a nonprofit housing organization is
anticipated for summer of 2015. Regarding the City -owned Mountain View mobile home
park, the transition is anticipated by the end of 2016 calendar year. Therefore, staff
recommends extending the existing property management contract with RECS for an
additional eighteen months which would allow continuity of services during this
transition period. The extension for the 18 months, in addition to the initial 63 month
contract, will result in a modified 81 -month contract. The current contract expires on
June 30, 2015.
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Financial Impacts and Budget Actions
The contract modification to be awarded to RECS is $701,357, for an amended contract
total not to exceed $3,249,071. The amendment includes an increase of $479,128 for
FY 2015 -16, and due to the planned transition of the 419 and 1616 Ocean Avenue
properties, $222,229 for FY 2016 -17. Budget authority for subsequent years will be
requested in each budget cycle for Council approval.
Prepared By: Patrick Gregorian, Senior Administrative Analyst
Approved Forwarded to Council
Andy Agle, Director QVHousing a4dl151a CS Elaine M Polachek, Interim City N4&Mg ®A 5
Attachments:
A. 3/9/2010 MVMHP
B. 7/22/2014 419 and 1616 Ocean Ave
C. 9/13/2011 Property Management of City -Owned Property
D. 12/11/2012 Affordable Housing Policy
E. 6/11/2013 Third Modification of Property Management Contract with RECS
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Reference:
Modified Contract
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(CCS)