SR 03-01-2016 3G
City Council
Report
City Council Meeting: March 1, 2016
Agenda Item: 3.G
To: Mayor and City Council
From: Andy Agle, Director, Housing Division, Housing and Economic Development
Subject: Property Management Services for Affordable Housing
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute a fifth modification to Contract #9183, in an amount not to exceed $164,245,
with Real Estate Consulting and Services, Inc. (RECS), a California-based company, for
property management services at City-owned residential properties. The proposed
amendment would result in a new total contract amount not to exceed $3,413,316.
The proposed amendment would not extend the existing term beyond December 2016.
Executive Summary
Real Estate Consulting and Services, Inc. (RECS) provides property-management
services for three City-owned residential rental properties and was selected through a
request-for-proposals process. Transfer of two properties subject to the contract
(1616 Ocean Avenue and 419 Ocean Avenue) to a local nonprofit affordable housing
organization has been delayed as a result of property title issues. In addition, the third
property (Mountain View Mobile Home Park) requires unanticipated capital repairs in
the immediate future. As a result, staff recommends that the contract with RECS be
increased by $164,245 to reflect the unforeseen needs.
Background
A professional services agreement with RECS was first approved by Council on
March 9, 2010 (Attachment A) to provide property management services for Mountain
View Mobile Home Park. On September 13, 2011 (Attachment B), Council approved
City-owned properties including 419 Ocean Avenue and 1616 Ocean Avenue.
On April 28, 2015 (Attachment C), Council approved a fourth modification to the
property management contract with RECS, involving a contract extension of 18 months
ending December 31, 2016, and an associated increase in contract budget.
On May 12, 2015 (Attachment D), Council authorized the City Manager to negotiate and
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execute agreements for the transfer of the 419 Ocean Avenue and 1616 Ocean Avenue
properties, as a package, to Community Corporation of Santa Monica (CCSM), a local
nonprofit affordable housing organization, for the purpose of operating the properties as
affordable housing and undertaking necessary rehabilitation. Staff originally anticipated
the transfer would occur by September 2015 and estimated the portion of the RECS
property management budget that was to be allotted for the two Ocean Avenue
properties accordingly. The existing RECS contract provides for property management
of Mountain View Mobile Home Park through December 2016, including funding for
necessary capital repairs.
Discussion
The scope of property management duties that RECS currently performs covers all
necessary routine functions, including: 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. 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.
Transfer of the two Ocean Avenue properties to CCSM has been delayed due to
inconsistencies in the legal description and boundaries for 1616 Ocean Avenue.
Proper boundaries must be defined before an accurate legal description can be
prepared and title insurance issued. Staff anticipates that the legal description issue will
be resolved within the next month and conveyance of the two Ocean Avenue properties
to CCSM will occur by June 2016.
To avoid an interruption of property management services and payment of operational
expenses, RECS has continued to provide ongoing property management services for
1616 Ocean Avenue and 419 Ocean Avenue during the delayed transfer period.
However, the RECS contract was budgeted in anticipation of transfer of the two Ocean
Avenue properties by September 2015, with the associated scope of expenses reduced
accordingly. The delayed transfer of the properties has resulted in several months of
unanticipated operating expenses. Therefore, the FY2015-16 contract budget is
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currently insufficient and will be exhausted by the end of March 2016.
Additionally, bids for the Mountain View Mobile Home Park pool area renovation, which
include fence replacement, installation of a lift, resurfacing of existing concrete, and
widening of a ramp, are higher than originally estimated. Furthermore, unanticipated
work associated with tree trimming, stump removal, and cart repair are also required for
the Mountain View property. Staff recommends that the issues be addressed in the
near term. As a result, additional funding in the RECS contract is needed to complete
the pool area improvements and other repairs. Total additional funds needed for
ongoing property management of 1616 and 419 Ocean Avenue through the end of June
2016, as well as capital improvements and repairs for Mountain View Mobile Home
Park, is $164,245. The current term of the contract, through December 2016, would be
unchanged.
RECS has provided property management services for City-owned property for six
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. RECS staffs an office at Mountain View
seven days a week (full-time during weekdays and part-time on the weekends).
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
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 written and oral communication, excellent
references, and competitive pricing. Their property management services was later
expanded to include all City-owned properties including 419 and 1616 Ocean Avenue.
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Financial Impacts and Budget Actions
The contract modification to be awarded to RECS is $164,245, for an amended contract
total not to exceed $3,413,316. Funds are available in the Housing and Economic
-16 budget in accounts 01264.533220 and
01264.555060.
Prepared By:
Elsa Brown, Senior Administrative Analyst
Approved Forwarded to Council
Attachments:
A. Staff Report 3.9.10
B. Staff Report 9.13.11
C. Staff Report 4.28.15
D. Staff Report 5.12.15
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