SR 07-12-2022 5H
City Council
Report
City Council Meeting: July 12, 2022
Agenda Item: 5.H
1 of 6
To: Mayor and City Council
From: Gigi Decavalles-Hughes, Director, Finance Department
Subject: Approval of Third Modification to Professional Services Agreement with
HR&A Advisors, Inc. for Preparation of a Report Pursuant to Section 9212 of
the California Elections Code on a Citizens’ Ballot Initiative
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute a third modification to agreement #108300 (formerly #10830) with
HR&A Advisors Inc. in the amount of $36,000 to prepare a Ballot Measure Impact
Report, pursuant to California Elections Code Section 9212, for the proposed Initiative
Measure to Establish Added Funding for Homelessness Prevention, Affordable
Housing, and Schools by Amending Santa Monica Municipal Code Chapter 6.96 to
Provide a Third Tier Transfer Tax Rate for Property Transfers of $8,000,000 or More
with an Eleven Member Resident Oversight Committee, that is seeking to qualify and be
placed on the November 8, 2022 ballot. This will result in a four-year amended
agreement with a new total amount not to exceed $454,900, with future year funding
contingent on Council budget approval.
Summary
On June 14, 2022, Council requested that the City Manager prepare a report pursuant
to Section 9212 of the California Elections Code on an initiative titled:
An Initiative Measure To Establish Added Funding For Homelessness
Prevention, Affordable Housing, And Schools By Amending Santa Monica
Municipal Code Chapter 6.96 To Provide A Third Tier Transfer Tax Rate
For Property Transfers Of $8,000,000 Or More With An Eleven Member
Resident Oversight Committee, seeking to qualify and be placed on the
November 8, 2022 ballot.
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Per the Elections Code, the report must be presented to the legislative body no later
than 30 days after the elections official certifies to the legislative body the sufficiency of
the petition. The Council action noted that the report shall be presented to City Council
as soon as possible, but not later than July 26, 2022.
Given the subject matter of the report, which may include the potential fiscal, land use,
economic development, and infrastructure impact of such a measure, as well as the
swift turnaround required, staff has determined that a modification to the current
contract with HR&A Advisors, Inc. for financial feasibility analysis and modeling of
potential changes to development standards and project requirements related to the
Housing Element, is the best approach to complete this report in the allotted time.
Viewed in isolation, the amount needed to commission this report ($36,000) would not
require Council approval if processed as a standalone contract. In the interest of
transparency and in light of the potential subject matter overlap with the existing
contract, staff seeks authority to enter into a third modification to include the required
report.
Background
On March 26, 2019, Council authorized an agreement with HR&A Advisors, Inc. to
provide financial feasibility analysis of potential affordable housing requirements and
minimum density. On November 12, 2019, Council authorized the acceptance of SB2
grant funds in the amount of $310,000 from the State of California Department of
Housing and Community Development and a first contract modification in the amount of
$179,000 with HR&A Advisors, Inc. for additional analysis related to housing production
in the context of the 6th Cycle Housing Element. HR&A’s amended contract provided for
a range of economic analyses, typical housing prototype modeling based on revised
standards, and policy and program evaluation necessary to inform the preparation of
the 6th Cycle Housing Element. During the City’s restructuring, Contract #10830 expired
before the scope of work was completed and a new contract was executed for the
remaining balance with Contract #108300.
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On June 14, 2022, Council approved a second modification to agreement 108300 in the
amount of $89,000 and an extension of the term of the contract for one additional year
to provide additional financial analysis in support changes that must be made to the
City’s Housing Element to comply with State housing law.
Discussion
A petition has been circulating in the community to place an initiative on the November
8, 2022 ballot. If the petition qualifies under the rules set forth in the California Elections
Code Sections 9200-9226, it will be presented to Council prior to the August 12, 2022
statutory deadline for submitting the ballot initiative to Los Angeles County.
Council has the ability to ask for a report on the impact of the initiative, as stated in
Section 9212 of the California Elections Code:
(a) During the circulation of the petition, or before taking either action described in
subdivisions (a) and (b) of Section 9215, the legislative 9215 body may refer the
proposed initiative measure to a city agency or agencies for a report on any or all
of the following:
(1) Its fiscal impact.
(2) Its effect on the internal consistency of the city’s general and specific plans,
including the housing element, the consistency between planning and zoning,
and the limitations on city actions under Section 65008 of the Government
Code and Chapters 4.2 (commencing with Section 65913) and 4.3
(commencing with Section 65915) of Division 1 of Title 7 of the Government
Code.
(3) Its effect on the use of land, the impact on the availability and location of
housing, and the ability of the city to meet its regional housing needs.
(4) Its impact on funding for infrastructure of all types, including, but not limited
to, transportation, schools, parks, and open space. The report may also
discuss whether the measure would be likely to result in increased
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infrastructure costs or savings including the costs of infrastructure
maintenance, to current residents and businesses.
(5) Its impact on the community’s ability to attract and retain business and
employment.
(6) Its impact on the uses of vacant parcels of land.
(7) Its impact on agricultural lands, open space, traffic congestion, existing
business districts, and developed areas designated for revitalization.
(8) Any other matters the legislative body requests to be in the report.
(b) The report shall be presented to the legislative body within the time prescribed by
the legislative body, but no later than 30 days after the elections official certifies to
the legislative body the sufficiency of the petition.
Among the items that Council discussed including in the report were the potential funds
that the measure might generate, what property transactions it would apply to, the
composition of the resident oversight committee, and whether there would continue to
be a need for funds dedicated to affordable housing in future years.
Because the potential ballot initiative is for a new tax revenue source and includes only
limited information about proposed expenditures of the revenue to be collected, most of
the illustrative examples of “impacts” in California Election Code Section 9212 cannot
be analyzed. However, the report can include useful background information about this
source of revenue, explain the mechanics of how the revenue would be collected,
provide a rough estimate of potential revenues based on past real estate sales, provide
some general illustrations about how the City’s share of the tax revenues could be
spent, and offer observations about potential risks to revenue collection or achievement
of intended objectives (e.g., financial feasibility implications for new market rate
residential development subject to the City’s Affordable Housing Production Program,
which HR&A has assisted the City to shape and implement over more than 20 years).
Portions of the impact report will also benefit from prototypes developed by HR&A for
the Housing Element update.
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Contractor Selection
HR&A Advisors, Inc. was selected on March 21, 2019 to provide the following:
• Update Financial Feasibility Analysis on the Downtown Community Plan (DCP)
• Explore Revised Development Standards and Incentives for Housing Projects on
Boulevards and in the Bergamot Area Plan
• Multi-Unit Districts Affordable Housing Fee and Density Study
The existing contract award was made as an exception to the competitive bidding
process pursuant to Section 2.24.80(d). Competition did not exist because HR&A had
completed extensive feasibility analysis related to evaluating the feasibility of the City’s
development standards, project requirements and fees including ongoing work on the
Affordable Housing Production Program (AHPP) and Housing Element, as well as
financial feasibility on the Downtown Community Plan, and 2015 Zoning Ordinance.
Completing a competitive procurement process is highly unlikely to produce cost-
competitive proposals from other sources, given HR&A’s experience and knowledge
with preparing modeling for the City.
Additionally, the recommended modification also qualifies as an exception to the
competitive bidding process pursuant to Section 2.24.250(g), given that the time
necessary to use the competitive solicitation process would not allow for the delivery of
such a report to the Council and community within the timeline required by the State
Election Code Section 9212(b).
Past Council Actions
Meeting Date Description
03/26/2019 Council approved a contract with HR&A Advisors, Inc to provide
empirical testing of prototypical private developments to help
increase the City’s supply of affordable housing
11/12/2019 Council authorized the City to accept an SB2 grant in the amount of
$310,000 and to authorize the City Manager to negotiate and
execute a first modification with HR&A in the amount of $179,000 for
further prototype testing in support of the 6th Cycle Housing Element
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6/14/2022 Council authorized the City Manager to negotiate and execute a
second modification to agreement #108300 in the amount of $89,000
and extend the term of for one additional year, with HR&A Advisors
Ince to provide additional analysis in support of the City’s Housing
Element.
Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the General Fund to increase the amount
of the agreement with HR&A Advisors Inc. Funds are included in the FY 2022-23
Adopted Budget in the Finance Department.
Contract Modification Request Amount
Agreement # Current Authorized
Amount
FY 2022-23 Modified
Request Amount
Account # Total Revised
Contract Amount
10830/108300 $268,900 20700002.556420 $268,900
10830/108300 $150,000 01700001.552010 $150,000
10830/108300 $36,000 01300001.552010 $36,000
TOTAL $454,900
Prepared By: Gigi Decavalles-Hughes, Director
Approved
Forwarded to Council
Attachments:
A. Staff Report June 14, 2022
B. Contract 108300
C. Contract 108300 First Modification
D. HRA Oaks Initiative_06-10-22 (1)
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City Council
Report
City Council Meeting: June 14, 2022
Agenda Item: 3.M
1 of 5
To: Mayor and City Council
From: David Martin, Director, City Planning
Subject: Approval of Second Modification to Professional Services Agreement with
HR&A for 6th Cycle (2021-2029) Housing Element
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute a second modification to agreement #108300 (formerly #10830) in the amount
of $89,000 and extend the term for one additional year, with HR&A Advisors Inc to
Provide Additional Financial Analyses in Support of the City’s Housing Element. This
will result in a four-year amended agreement with a new total amount not to exceed
$418,900, with future year funding contingent on Council budget approval.
Summary
On October 12, 2021, the City Council adopted the 6th Cycle (2021-2029) Housing
Element. On February 8, 2022, the California Department of Housing and Community
Development (HCD) determined that although Santa Monica’s adopted 6th Cycle (2021-
2029) Housing Element Update meets many statutory requirements, further revision is
necessary in order to comply with all aspects of State Housing Element law (Attachment
A). At the time that HCD’s comments on the adopted Housing Element were received,
the Planning Commission was holding public hearings on changes to zoning and
adopted land use plans that were intended to implement the Housing Element. As a
result of HCD’s determination, rezoning work has been put on hold until staff can
determine what further revisions are necessary to bring the City’s Housing Element into
compliance with State Housing Element law and receive approval from HCD.
Rezoning is necessary to demonstrate to HCD that the City can accommodate its
Regional Housing Needs Assessment (“RHNA”) allocation of 8,895 units between 2021
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and 2029 with a buffer to address net loss of units. Rezoning efforts include
establishing development standards that must be both feasible and sufficient for the City
to accommodate the RHNA as required by HCD.
HR&A advisors has provided financial feasibility analysis and modeling of potential
changes to development standards and project requirements which was used to inform
the rezoning programs included in the 6th Cycle Housing Element. HCD’s comments
require further revisions to the Housing Element and expanded analysis to establish
feasible development standards that can accommodate the RHNA plus a buffer. A
modification to the agreement of $89,900 is required to prepare additional analysis for
the Housing Element as necessary to comply with State law.
Background
The RHNA is mandated by State Housing Law as part of the periodic process of
updating local housing elements of the General Plan. The RHNA quantifies the need for
housing within each jurisdiction during specified planning periods. For the 6th Cycle
planning period of 2021-2029, Santa Monica’s RHNA allocation is 8,895 units, of which
69% must be affordable.
On March 26, 2019, Council authorized an agreement with HR&A Advisors, Inc. to
provide financial feasibility analysis of potential affordable housing requirements and
minimum density. On November 12, 2019, Council authorized the acceptance of SB2
grant funds in the amount of $310,000 from the State of California Department of
Housing and Community Development and a first contract modification in the amount of
$179,000 with HR&A Advisors, Inc. for additional analysis related to housing production
in the context of the 6th Cycle Housing Element. HR&A’s amended contract provided for
a range of economic analyses, typical housing prototype modeling based on revised
standards, and policy and program evaluation necessary to inform the preparation of
the 6th Cycle Housing Element. During the City’s reorganization Contract #10830
expired before the scope of work was completed and a new contract was executed for
the remaining balance with contract #108300.
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On October 12, 2021, City Council adopted the 6th Cycle (2021-2029) Housing Element
and certified the associated 6th Cycle Housing Element EIR. Following Council
adoption, City staff submitted the adopted 6th Cycle Housing Element to HCD on
November 10, 2021 for a 90-day review period and certification. On February 8, 2022,
the City received HCD’s review letter stating that additional changes are required to the
adopted Housing Element to comply with State housing law.
Contractor Selection
HR&A Advisors, Inc. was selected on March 21, 2019 to provide the following:
• Update Financial Feasibility Analysis on the Downtown Community Plan (DCP)
• Explore Revised Development Standards and Incentives for Housing Projects on
Boulevards and in the Bergamot Area Plan
• Multi-Unit Districts Affordable Housing Fee and Density Study
This recommended award was made as an exception to the competitive bidding
process pursuant to Section 2.24.80(d). Competition does not exist because HR&A has
completed extensive feasibility analysis related to evaluating the feasibility of the City’s
development standards, project requirements and fees including ongoing work on the
Affordable Housing Production Program (AHPP) and Housing Element, as well as
financial feasibility on the Downtown Community Plan, and 2015 Zoning Ordinance.
Therefore, HR&A has the unique ability or capability to complete the abovementioned
studies related to the Housing Element. Completing a competitive procurement process
is highly unlikely to produce cost-competitive proposals from other sources, given
HR&A’s experience and knowledge with preparing modeling for the City.
Discussion
The 6th Cycle Housing Element includes key rezoning programs that are necessary to
accommodate the affordable allocation in the RHNA including Programs 1F and 1J.
Program 1F (rezoning of Downtown) commits the City to modifying the heights and floor
area ratios (FARs) in the Downtown Community Plan area to ensure they are set at
levels that can support the minimum AHPP requirements and to support feasible
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housing projects. Similarly, Program 1J (rezoning of mixed-use areas outside of
Downtown) commits the City to amending the Zoning Ordinance, LUCE, and the
Bergamot Area Plan (BAP) to increase FAR and height standards to levels that can
support feasible housing projects. The City’s assumptions of feasibility and the City’s
Suitable Sites Inventory (SSI), a tool used to demonstrate capacity, are based on the
results of a feasibility analysis prepared by HR&A dated June 9, 2021. As stated in the
6th Cycle Housing Element, the feasible FARs for housing projects in the Downtown
range from a minimum 2.75 to 4.0 with heights ranging from 55 feet to 84 feet and the
feasible FARs for housing projects in the remaining areas of the City range from a
minimum 2.75 to 3.25 with heights ranging from 55 feet to 65 feet.
On February 8, 2022, the City received HCD’s review letter stating that additional
changes are required to the adopted Housing Element to comply with State housing
law. Further changes to the development standards in Programs 1F and 1J as well as
other programs in the 2021-2029 6th Cycle Housing Element would require additional
analysis, including financial feasibility testing. A second modification to the agreement
would expand HR&A’s scope of work to conduct further analysis of additional changes
to the Housing Element in response to HCD’s comments. Furthermore, this second
modification to the agreement would extend the terms of the contract to October 30,
2023.
Past Council Actions
Meeting Date Description
03/26/2019 Council approved a contract with HR&A Advisors, Inc to provide
empirical testing of prototypical private developments to help
increase the City’s supply of affordable housing
06/11/2019 Council adopted a resolution authorizing application for, and receipt
of, SB2 grant funds in an amount not to exceed $310,000 from the
California Housing and Community Development Department (HCD)
11/12/2019 Council authorized the City to accept the SB2 grant in the amount of
$310,000 and to authorize the City Manager to negotiate and
execute a first modification with HR&A in the amount of $179,000 for
further prototype testing in support of the 6th Cycle Housing Element
10/12/21 Council adopted the 2021-2029 6th Cycle Housing Element
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Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the Miscellaneous Grants Fund to
increase the amount of the agreement with HR&A Advisors Inc. Funds are included in
the FY 2021-22 Adopted Budget in the Community Development Department.
Contract Modification Request Amount
Agreement # Current
Authorized
Amount
FY 2021-22
Modified
Request
Amount
Account # Total Revised
Contract
Amount
10830/108300 $179,000 $89,900 20700002.556420 $268,900
10830/108300 $150,000 $ 01700001.552010 $150,000
TOTAL $418,900
Prepared By: Rachel Kwok, Environmental Planner
Approved
Forwarded to Council
Attachments:
A. March 26, 2019 Council Staff Report
B. June 11, 2019 Council Staff Report
C. November 12, 2019 Council Staff Report
D. 00 EXECUTED CONTRACT #108300 HR&A
E. 00 EXECUTED_PSA_&_Scope-_First_Mod_HR&A_108300
F. HR&A Oaks Initiative_06-10-22
G. Written Comments
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Contract No. 108300 (CCS)
PROFESSIONAL SERVICES AGREEMENT
This Professional Services Agreement (“Agreement”), entered into as of
_________________(“Execution Date”), by and between the City of Santa Monica
(“City”) and HR&A Advisors, Inc. (“HR&A”), is made with reference to the following:
RECITALS:
A. The City is a municipal corporation duly organized and validly existing under the laws
of the State of California with the power to carry on its business as it is now being
conducted under the statutes of the State of California and the Charter of the City.
B. HR&A is qualified to do business, and is doing business, in the State of California.
HR&A represents it has the background, knowledge, experience and expertise
necessary to provide the services set forth in this Agreement.
C. The City and HR&A now desire to enter into an agreement for HR&A to provide
professional services to the City.
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as
follows:
TERMS AND CONDITIONS
1. Term. This Agreement begins on the Execution Date and terminates on June 30,
2022, unless sooner terminated in accordance with Section 14.
2. HR&A Services. HR&A will perform all of the services (“Services”) described in
Exhibit A, Scope of Services. HR&A will complete the Services in accordance with
Exhibit B, Budget.
3. City Services. The City agrees to:
3.1 Make available to HR&A any currently existing documents, data or information
required for the performance of the Services.
3.2 Designate a representative authorized to act on behalf of City.
3.3 Promptly examine and render findings on all documents submitted for staff
review by HR&A.
4. Compensation. The City will compensate HR&A for the Services performed in an
amount not to exceed $219,000.00, as set forth in Exhibit B.
5. Invoices. HR&A will invoice the City for the Services in accordance with Exhibit B
and the City will pay any undisputed amount within 30 days of receipt.
6. Notices. All notices, demands, requests or approvals to be given under this
Agreement, must be in writing and will be deemed served when delivered personally,
DocuSign Envelope ID: E40D9E3E-2795-4CBE-85C6-23137938095E
11/23/2020
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by email, or on the third business day after deposit in the United States mail, postage
prepaid, registered or certified, addressed as follows:
6.1 All notices, demands, requests or approvals to the City:
City Planning Division
City of Santa Monica
1685 Main Street, Mail Stop 28
Santa Monica, California 90401
Attention: Rachel Kwok
Re: Contract No. 108300 (CCS)
with a copy to:
Santa Monica City Attorney’s Office
1685 Main Street, Third Floor
Santa Monica, California 90401
Attention: City Attorney
Re: Contract No. 108300 (CCS)
6.2 All notices, demands, requests or approvals to HR&A:
HR&A
700 South Flower Street, Suite 2995
Los Angeles, California, USA
Attention: Paul J. Silvern, Vice President
psilvern@hraadvisors.com
Re: Contract No. 108300 (CSS)
7. Independent Parties. Both parties to this Agreement will be acting in an independent
capacity and not as agents, employees, partners, or joint venturers of one another.
Neither the City nor its officers or employees will have any control over the conduct
of HR&A or any of HR&A’s agents, employees, or subconsultants, except as
otherwise provided in this Agreement.
8. Integrated Contract. This Agreement represents the full and complete understanding
of every kind or nature whatsoever between the parties. Any preliminary negotiations
and agreements of any kind or nature are merged into this Agreement. No oral
agreement or implied covenant may be held to vary the provisions of this Agreement.
This Agreement may be modified only by written agreement signed by City and
HR&A, and approved as to form by the City Attorney.
9. Insurance. Prior to commencing work, HR&A must procure, maintain and pay for
insurance against claims for injuries to persons or damage to property that may arise
from or in connection with the performance of the Services by HR&A or HR&A’s
agents, representatives, employees or subconsultants for the duration of this
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Agreement. HR&A must obtain insurance that, at a minimum, meets the
requirements for insurance set forth in Exhibit C, Insurance Requirements and
Verifications.
10. Defense and Indemnification.
10.1 Indemnification. As to HR&A’s Services produced under this Agreement,
HR&A agrees to defend, indemnify, protect, and hold harmless the City, its
agents, officers, boards and commissions, and employees (collectively, “City”)
from and against any and all liability, claims, demands, damages, or costs,
including but not limited to attorney’s fees, or payments for injury to any
person or property (collectively, “Losses”) caused or claimed to be caused by the
acts, errors and/or omissions of HR&A, or HR&A’s employees, agents,
officers, and subconsultants. HR&A’s responsibilities under this Section 10.1
include liability arising from, connected with, caused by, or claimed to be
caused by the active or passive negligent acts or omissions of the City, which
may be in combination with the acts or omissions of HR&A, its employees,
agents or officers, or subconsultants; provided, however, that HR&A’s duty to
defend, indemnify, protect and hold harmless shall not include any Losses
arising from the sole negligence or willful misconduct of the City.
Notwithstanding HR&A’s obligation to defend City hereunder, City has the
right to conduct its own defense and seek reimbursement for reasonable costs
of defense from HR&A, if City chooses to do so.
10.2 Enforcement Costs. HR&A agrees to pay any and all costs the City incurs
enforcing the indemnity, defense and hold harmless provisions set forth in
Section 10.1.
11. Prohibition Against Transfers.
11.1 HR&A may not assign, hypothecate, or transfer this Agreement or any interest
therein directly or indirectly, by operation of law or otherwise without the prior
written consent of City. Any attempt to do so without the City’s consent will
be null and void, and any assignee, hypothecatee or transferee acquires no right
or interest by reason of such attempted assignment, hypothecation or transfer.
11.2 The sale, assignment, transfer or other disposition of any of the issued and
outstanding capital stock of HR&A or of any general partner or joint venturer
or syndicate member of HR&A, if a partnership or joint venture or syndicate
exists, which results in changing the control of HR&A, will be construed as an
assignment of this Agreement. Control means 50% or more of the voting
power of the corporation.
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12. Permits and Licenses. HR&A, at its sole expense, must obtain and maintain during
the term of this Agreement all required business and professional permits, licenses
and certificates.
13. Waiver. A waiver of any breach of this Agreement may not be deemed a waiver of any
subsequent breach of the same or any other term, covenant, or condition of this
Agreement.
14. Default and Termination.
14.1 If HR&A fails or refuses to perform any of the provisions of this Agreement,
and if the default is not cured within a period of five days after the City’s
written notice of default specifying the nature of the default, City may
immediately terminate this Agreement by written notice to HR&A.
14.2 The City has the option, at its sole discretion and without cause, of terminating
this Agreement by giving ten days’ written notice to HR&A. Upon termination
of this Agreement, City will pay HR&A any compensation earned and unpaid
up to the effective date of termination.
15. Compliance with Law. HR&A must comply with all laws of the State of California
and the United States, and all ordinances, rules, and regulations enacted or issued by
City.
16. Discrimination. HR&A may not discriminate in the provision of services hereunder
because of race, color, religion, national origin, ancestry, sex, age, sexual orientation,
marital status, AIDS or disability.
17. Nuisance. HR&A may not maintain, commit, or permit the maintenance or
commission of any nuisance in connection with the performance of services under
this Agreement.
18. Records.
18.1 HR&A must maintain complete and accurate records with respect to costs,
expenses, receipts and other such information required by the City for any
services provided where compensation is on the basis of hourly rates,
subconsultant costs, or other direct costs. HR&A must keep the records,
together with supporting documents, separate from other documents and
records and maintain them for a period of three years after receipt of final
payment.
18.2 HR&A must maintain records in sufficient detail to permit an evaluation of the
Services and in accordance with generally accepted accounting principles.
HR&A must clearly identify all records and make them readily accessible to the
City. At the City’s request, HR&A must provide records in an electronic
format and, if necessary, access to any proprietary software to view such
electronic records.
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18.3 HR&A must allow the City to have free access to HR&A’s books and records
and to inspect all work, data, documents, proceedings and activities related to
this Agreement. The City has the right to examine or audit HR&A’s records,
and HR&A agrees to cooperate with any examination or audit of its records. If
a City audit discloses an error of 5% or more in information reported by
HR&A, HR&A agrees to pay the cost of the City’s audit computed on the
basis of four times the direct payroll of the audit staff completing the audit and
audit report.
19. Work Product; Reports.
19.1 Any work product prepared or caused to be prepared by HR&A or any
subconsultant for this Agreement will be the exclusive property of City. No
work product given to or prepared by HR&A or any subconsultant pursuant to
this Agreement may be made available to any individual or organization by
HR&A without prior written approval by City.
19.2 At the City’s request, HR&A must furnish reports concerning the status of the
Services.
20. Standard of Care. HR&A agrees to provide all Services, including services performed
by any subconsultant, in a manner consistent with the level of care and skill ordinarily
exercised by members of HR&A’s profession currently practicing in the same locality
under similar conditions.
21. Subconsultants.
21.1 If HR&A proposes to have any subconsultant perform any part of the Services,
HR&A must submit a request for approval in writing, describing the scope of
work to be subcontracted, the name of the proposed subconsultant, and the
total price or hourly rates used in preparing an estimated cost for the
subconsultant’s services. The City, in its sole discretion, may grant or deny the
request.
21.2 HR&A will be responsible for the quality of any subconsultant’s work. Every
subcontract or agreement of any kind entered into between HR&A and any
subconsultant (or between any subconsultant and others) must contain the
following provision:
This agreement is consistent with all terms and conditions of
the Agreement No. 108300 (CCS) entered into between the
City of Santa Monica and HR&A on^^___________.
22. Governing Law. The laws of the State of California, without regard to any choice of
law provisions, will govern this Agreement.
23. Venue and Jurisdiction. The City and HR&A agree that the Services will take place
in Los Angeles County. Any litigation arising out of this Agreement may only be
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brought in either the United States District Court, Central District of California, or
the Superior Court of California, County of Los Angeles, West District, as
appropriate. The parties agree that venue exists in either court, and each party
expressly waives any right to transfer to another venue. The parties further agree that
either court will have personal jurisdiction over the parties to this Agreement.
24. Survival of Provisions and Obligations. Any provision of this Agreement, which by its
nature must be exercised after termination of this Agreement, will survive termination
and remain effective for a reasonable time. Any obligation that accrued prior to
termination of this Agreement will survive termination of this Agreement.
25. Exhibits. The following exhibits are incorporated by reference into this Agreement as
though fully set forth herein.
Exhibit A Scope of Services
Exhibit B Budget
Exhibit C Insurance Requirements
In witness whereof, the parties have caused this Agreement to be executed the day and
year first above written.
ATTEST:
______________________________
DENISE ANDERSON-WARREN
City Clerk
APPROVED AS TO FORM:
______________________________
LANE DILG
City Attorney
CITY OF SANTA MONICA,
a municipal corporation
By: ______________________________
RICK COLE
City Manager
ABC Corporation
#VENDOR
By: ________________________________
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George Cardona
Interim City Attorney
11/19/2020
Paul J. Silvern, Vice President
HR&A Advisors, Inc.
Paul J. Silvern
11/19/2020
11/23/2020
Lane Dilg
Interim City ManagerCity Clerk
Denise Anderson-Warren
11/30/2020
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Exhibit A
Scope of Services
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New York | Dallas | Los Angeles | Raleigh | Washington DC
Revised: October 21, 2020
via email to: jing.yeo@smgov.net
Jing Yeo
Planning Manager
Community Development Dept.
City Hall, Room 212
1685 Main Street
Santa Monica, CA 90404
Re: Proposal to Update 2019 AHPP Analysis and Analyze New Prototypes in Additional Commercial Areas
Dear Jing:
Per your request, HR&A Advisors, Inc. (HR&A) is pleased to provide this proposal to provide additional
prototype testing to determine whether increased development standards and/or new affordable housing
requirements (i.e., in terms of percentages, unit mix and affordability levels) can accelerate development of
mixed-income housing. This effort will include updating feasibility analysis for 14 prototypes from our
previous analysis, modelling 14 new prototypes in additional commercial areas, and updating real estate
market and construction cost assumptions for selected market areas.
Similar to previous analysis completed by HR&A, the assignment involves empirical testing of prototypical
private developments to establish the financially-feasible limits of modified affordable housing requirements
and development fees, utilizing static pro forma financial feasibility Excel models to test the developer
investment return implications of revised affordable housing requirements on prototypical developments. The
assignment is also similar to a financial feasibility analysis that we are currently completing for the Los
Angeles City Planning Department, wherein our analytic model was re-designed to evaluate the
development capacity (in terms of incremental stories or FAR) that would be required to support Transit-
Oriented Communities affordability percentages and income levels in Downtown Los Angeles. Our proposed
approach to the new assignment will build on these prior efforts.
PROPOSED SCOPE OF WORK
HR&A will undertake the following tasks in a generally sequential order:
Task 1. Kick-off Meeting and Discussion About Modeling Assumptions.
HR&A will meet with City staff to discuss various elements of the analysis, obtain certain data and clarify
certain modeling assumptions. These include, but are not necessarily limited to the following:
Confirm the general objectives for performing this analysis and review the scope and schedule for
completing it;
Confirm communication protocols between HR&A and the City staff team, including the City
Attorney’s office;
Confirm the 24 prototypical mixed-use development scenarios for Bergamot, Boulevards, Lincoln,
Downtown, General Commercial - Santa Monica Boulevard and Neighborhood Commercial (see
Task 2 for the list of prototypes to be confirmed), including a range of flexibility in terms of changes
to existing Tier structures, FAR, or height;
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Confirm that HR&A will first test each prototype with the exact affordable housing requirements in
the Zoning Code (i.e., base case) and then a set of requirements (i.e., household income levels,
minimum unit sizes and affordable unit mix) provided by City staff;
Confirm that HR&A should use FY 2020-21 City development impact fee, permit charges and other
fee schedules for development costs, and obtain the applicable schedules of all such fees, including
recently approved standards for Tier 2 and Tier 3 developments;
Obtain the most current AHPP household income, maximum rent and maximum sale price schedule;
and
Discuss what types of City land use permits and environmental documentation should be assumed
for each prototype (if different), and their related average approval schedules and costs; and
Discuss alternative means to improve construction cost estimates for the prototypes.
Deliverables: Meeting agenda and meeting summary memo.
Task 2. Develop the Specifications of All Development Prototypes.
Based on the results of the above meeting, HR&A will collaborate with City Planning staff to prepare a
general profile for each of 24 prototypical development scenarios, including total site area (if different
from 15,000 s.f. for the Boulevards), acceptable range of gross building floor area, total net floor area and
related building efficiency factors, net floor area by land use, acceptable range of total building height
and number of stories, average unit sizes for both market rate and affordable units, dwelling unit counts by
type, parking counts and number of subterranean levels, among other modeling assumptions. This analysis
will vary from our previous analyses, assuming concurrence from City staff, wherein we will design our model
to test incremental development capacity (in terms of additional floors/FAR of multifamily housing and
additional floors of subterranean parking) within a reasonable set of parameters (i.e., setbacks, construction
type, etc.). These specifications should reflect all recent changes to development standards approved by the
City Council. This will allow HR&A to rapidly and incrementally test additional development capacity
required to support certain affordable housing requirements while maintaining acceptable developer profit
margin to incentivize development.
Analyze a total of 24 prototypes including:
Bergamot Area Plan – Mixed-Use CD and Bergamot Transit Village
Boulevards – Mixes Use Boulevard – Wilshire and Mixed-Use Boulevard Low - Santa Monica
General Commercial – Lincoln
R2/R3 Zones
Downtown – Transit Adjacent and Neighborhood Village
General Commercial – Santa Monica Boulevard
Neighborhood Commercial
Deliverable: Final specification of physical characteristics and related assumptions for all prototypes.
Task 3. Update Current Real Estate Market Conditions for the Most Sensitive Financial Feasibility Modeling
Assumptions.
This includes updating relevant assumptions used in prior related HR&A financial feasibility modeling to pre-
COVID-19 conditions, specifically for up to 5 submarkets (potentially including Downtown, the Boulevards,
Bergamot, Ocean Park, and Montana). In doing so HR&A will utilize a variety of third-party data sources
available to HR&A, including Co-star, Reis, quarterly real estate market surveys prepared by several real
estate brokerages and other real estate services that include either Santa Monica-specific or more general
Westside rents, absorption and vacancy data, operating expenses, income capitalization rates, and project
financing terms and pricing. Optional Task 12 below addresses various sensitivities that HR&A can run to
demonstrate the potential impact of long-term impacts of the COVID-19 pandemic.
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HR&A will consult with local developers and architects to confirm the development cost assumptions during
the course of the analytic process, as described in Task 10. HR&A can subcontract with an independent
professional construction cost estimator to provide assumptions about above-grade and below grade hard
construction costs for each prototype if required.
To support this work, City staff will supply HR&A with an updated inventory of recent multi-family projects
that have been completed or still have active applications under review during the past five years, as
applicable to all prototypes.
Deliverable: The assumptions derived from this Task will be incorporated into the deliverables for Task 4.
Task 4. Prepare Financial Feasibility Pro Forma Models for Each Prototype.
HR&A will first prepare two base case financial feasibility models for each retail/apartment prototype
assuming the Tier 2 affordable housing options most frequently used by developers (i.e., first at 7.5% of the
units affordable to 30% income households; then 15% affordable to 50% income households; each using
the unit mix by bedrooms per unit and other requirements specified in the Zoning Code). HR&A will then
prepare an analysis case for each prototype using a new set of affordable housing requirements determined
through discussion with City staff. These feasibility models (both base cases and analysis case) will resemble
the type of Excel workbook pro formas prepared by HR&A for previous analyses of this type.
Central to this analysis are the feasibility thresholds employed. Again, building on previous work of this type,
HR&A will use two different, but related measures, both of which would have to be met for the results to be
considered “financially feasible.” These are:
1) Return on Total Development Cost1, which is calculated as Net Operating Income divided by Total
Development Cost, the result of which should be at least one to two percentage points above the
weighted average of the income capitalization rates for each land use in the prototype; and
2) Developer Profit Margin, which is calculated as Capitalized Project Value minus Total Development Cost,
the result of which should be at least equal to 10 percent of net Capitalized Project Value.
The pro forma models will be designed in a way that will make it relatively easy to test the implications of
changing the key elements of a set of assumed affordable housing standards (i.e., percentage requirements
by income level and unit mix), should any of the initial analysis cases prove to be financially infeasible. But
HR&A will not make any such changes until the feasibility results for the base cases and initial analysis cases
have been reported to City staff.
Deliverable: Pro forma model results for each prototype and associated affordable housing assumptions.
Task 5. Document 100% Affordable Housing Opportunities and Constraints.
HR&A will review and document development standards applicable to 100% affordable housing projects
across the City, and will engage non-profit affordable housing developers to determine the impact of
development standards on the feasibility of affordable housing projects. Because 100% affordable housing
projects, which are typically funded through the use of Low-Income Housing Tax Credits (“LIHTC”) and other
sources, are not well-suited to conventional financial feasibility pro forma analysis, HR&A will develop a list
of opportunities and constraints for affordable housing projects Citywide and within individual zoning
districts. This documentation will be focused on the impact of development standards and physical location
on the availability of land, pursuit of funding/financing, and other relevant criteria. These findings will be
summarized in the deliverable associated with Task 6.
1 Assuming rental projects only. Analysis for condo scenarios will require additional budget depending on the scope.
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Task 6. Preliminary Results Briefing.
At the end of the preceding task, HR&A will prepare a presentation-style briefing summary to support a
discussion meeting with City staff. The purposes of this meeting are to report on: (1) the degree to which the
prototypes are financially feasible; (2) the degree to which any new affordable housing requirements
appear to be feasible; (3) if not, what adjustments to the modeling should be pursued to achieve financial
feasibility, and in what order of policy priority (i.e., percentages of affordable units, affordability level and
unit mix).
Deliverable: Briefing book summarizing pro forma modeling approach, assumptions and preliminary results.
Task 7. (Optional) Allowance for Further Feasibility Testing.
This is an as-needed task for any further sensitivity testing that may be required, should the initial analysis
case results indicate that modifications of new affordable housing requirements or development standards
would be needed to achieve financial feasibility for one or more of the prototypes. A general schedule and
budget allowance are included for this task, but it may require augmentation if more than one round of
sensitivity testing is required.
Deliverable: Additional pro forma model results, as needed.
Task 8. (Optional) Revised Results Briefing.
This is another as-needed task for summarizing and discussing the results with City staff about any needed
sensitivity testing as described above.
Deliverable: Updated briefing book summarizing any additional pro forma modeling.
Task 9. Memorandum Report.
Once the analysis has been finalized and all questions and issues of concern to City staff have been
addressed, HR&A will prepare a memorandum report describing the analysis approach, assumptions,
findings and conclusions. The memorandum will include a concise executive summary, a narrative explanation
of approach and key assumptions, and conclusions. It will also include attachments with the output from the
financial feasibility models. The memorandum will be prepared first in draft for review and comment by the
City staff project team, and then put into final form after considering any comments on the draft.
HR&A acknowledges that all preliminary and revised analysis, internal briefings and other communications
with City staff will be treated as strictly confidential, and possibly subject to attorney-client privilege, until
City staff approves public release of the Final Memorandum Report.
Deliverables: Draft and Final Memorandum Report.
Task 10. Stakeholder Briefings.
This task consists of: up to two roundtable briefings with developers (including non-profits), architects and
property owners, which may be convened by the Santa Monica Area Chamber of Commerce, to provide
input on key assumptions and to review HR&A’s draft findings, conclusions and recommendations; and up to
two meetings with other local stakeholders to be determined in coordination with City staff, also to review
HR&A’s draft findings, conclusions and recommendations. The specific schedule and format for these meetings
will be determined after consultation with City staff but are intended to occur before Task 10 (Public
Presentations).
Deliverables: Meeting presentation briefing materials and meeting results summary memos.
Task 11. Public Presentations.
This task is an allowance for HR&A to appear at public meetings to present and discuss the results of this
analysis. For budgeting purposes, the schedule and budget assume two meetings with the Housing
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Commission, two with the Planning Commission and two with the City Council, including time to prepare
materials for the meetings, contribute to relevant sections of staff reports and PowerPoint presentations, and
participate in the meetings. The schedule for these meetings will be determined in consultation with City staff,
but it is intended that one set of public meetings will occur prior to Task 8 (Memorandum Report) and one
after Task 9 (Stakeholder Briefings).
Deliverables: HR&A presentation briefing materials and, as needed, written comments on companion City staff
presentation.
Task 12. (Optional) COVID-19 Updates
Because our modeling will not yet account for the full near-term impacts of COVID-19 on the real estate
market, we can update our analysis at a later date once the longer-term impacts are clear, or run subsequent
sensitivity models. This task would assess the impact of various changes to real estate revenues, financing
costs and construction costs on supportable levels of affordable housing.
PROPOSED STAFFING AND SCHEDULE
All the work described above will be prepared by qualified HR&A professional staff working under the
direct supervision of Paul J. Silvern, Vice President. This includes Thomas Jansen, a Principal (as Project
Manager), Ada Peng, a Senior Analyst and Jenna Gray, a Research Analyst.
Subject to further discussion with City staff, subsequent decisions about whether multiple rounds of sensitivity
testing may be required, and assuming timely City staff input during the progress of the work, HR&A will
complete the above-described tasks on approximately the following schedule, including overlaps between
individual tasks to the degree possible, but also allowing for the further feasibility testing and related
discussion tasks, if needed:
Task Cumulative Time
Task 1. Kick-off Meeting Week 1
Task 2. Specify 24 Prototypes Week 4
Task 3. Update Market Assumptions Week 6
Task 4. Base Case & Initial Analysis Case Feasibility Models Week 9
Task 5. Document 100% Affordable Housing Opportunities & Constraints Week 9
Task 6. Preliminary Results Briefing & Meeting Week 10
Task 7. Allowance for Further Feasibility Testing Week 12
Task 8. Allowance for Revised Results Briefing Week 14
Task 9. Draft & Final Memorandum Report To Be Determined
Task 10. Stakeholder Briefings To Be Determined
Task 11. Presentations to Commissions & City Council To Be Determined
Task 12. COIVD-19 Updates To Be Determined
PROPOSED BUDGET
Based on our experience with comparable projects, and taking into account certain economies available
from our previous related assignments for the City, we estimate that the completion of the above scope of
work will require a budget of $219,000.00, excluding customary reimbursable expenses (which we expect
to be limited). This total is allocated among individual tasks approximately as follows.
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Task Cost
Task 1. Kick-off Meeting $4,000
Task 2. Specify 24 Prototypes $26,000
Task 3. Update Market Assumptions $24,000
Task 4. Base Case & Initial Analysis Case Feasibility Models $50,000
Task 5. Document 100% A.H Opportunities & Constraints $5,000
Task 6. Preliminary Results Briefing & Meeting $8,000
Task 7. Allowance for Further Feasibility Testing $24,000
Task 8. Allowance for Revised Results Briefing $8,000
Task 9. Draft & Final Memorandum Report $12,000
Task 10. Stakeholder Briefings $8,000
Task 11. Presentations to Commissions & City Council $20,000
Task 12. COVID-19 Updates $15,000
Subtotal Fees $204,000
Contingency $15,000
Total $219,000
The proposed budget includes a roughly 7.5 percent contingency, based on our experience that these kinds
of analyses frequently require mid-term changes in assumptions that require additional work beyond the
original scope of the assignment. Customary expenses should be limited to third party data acquisition and
local travel to meetings; these are charged at their direct cost to HR&A without mark-up. Any additional
services that may be requested can be provided on a time and materials basis, per the hourly rate schedules
shown in Attachment A to this proposal letter, or on a mutually agreeable fixed fee basis, as City staff may
prefer. We propose to invoice the City on a monthly basis for the percentage of each task completed during
the prior month.
**********************
We hope you find the foregoing proposal responsive to the City’s needs. Once finalized, we assume City
staff will prepare a standard City professional services contract using this proposal letter to define the scope
of work, schedule and compensation. We are very familiar with the City contract, and related City contract
requirements, and take no exceptions to their terms or conditions.
We can be available to discuss this proposal with you and your colleagues as needed to clarify any issues
or discuss any amendments that may be required. We look forward to the possibility of working with you
and the other members of the City project team on this assignment.
Sincerely,
PAUL J. SILVERN,
Vice President
Attachment A: 2020 HR&A Hourly Rate Schedule for Public Sector and Non-Profit Clients
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Attachment A
HR&A Advisors, Inc. 2020 Hourly Rate Schedule for Public Sector & Non-Profit Clients
Hourly rates for HR&A staff are as follows:
Personnel Hourly Rate
Chair / Vice Chair $ 535
Partner $ 395
Principal $ 350
Director $ 315
Senior Analyst $ 240
Analyst $ 190
Research Analyst $ 150
Admin $ 105
HR&A bills for customary out-of-pocket expenses (e.g., travel costs, mass reproduction, specialized graphics,
long-distance telephone, messenger and overnight delivery) at their direct cost to HR&A without mark-up.
Depositions, mediations, arbitration hearing or trial testimony hours are billed at time and one-half.
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Exhibit B
Budget
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Exhibit C
Insurance Requirements and Verifications
Consultant shall procure and maintain for the duration of the Agreement insurance against
claims for injuries to persons or damages to property that may arise from or in connection
with the performance of the work hereunder by the Consultant, its agents, representatives,
employees or subcontractors.
Minimum Scope and Limits of Insurance
Coverage shall be at least as broad as:
1. Commercial General Liability (CGL): Insurance Services Office Form CG 00 01
covering CGL on an “occurrence” basis, including products and completed operations,
property damage, bodily injury and personal and advertising injury, with limits of no
less than $1,000,000 per occurrence. If a general aggregate limit applies, either the
general aggregate limit shall apply separately to this project/location (Insurance Services
Office Form CG 25 04) or the general aggregate limit shall be twice the required
occurrence limit.
2. Automobile Liability: Insurance Services Office Form CA 00 01 covering Code 1 (any
auto), or if Consultant has no owned autos, Code 8 (hired) and Code 9 (non-owned),
with limits of no less than $1,000,000 per accident for bodily injury and property
damage.
3. Workers’ Compensation: Workers’ Compensation insurance as required by the State
of California, with Statutory Limits and Employers’ Liability Insurance with limits of
no less than $1,000,000 per accident for bodily injury or disease (see footnote #1).
4. Professional Liability: Insurance appropriate to the Consultant’s profession with limits
of no less than $1,000,000 per occurrence or claim/$2,000,000 in the annual aggregate.
If the Consultant maintains broader coverage or higher limits than the minimums shown
above, the City of Santa Monica requires and shall be entitled to any broader coverage and
higher limits maintained by the Contractor. Any available insurance proceeds in excess of
the specified minimum limits of insurance and coverage shall be available to the City of
Santa Monica.
Other Insurance Provisions
1. The insurance policies are to contain, or be endorsed to contain, the following
provisions:
a. Additional Insured Status: The City of Santa Monica, its officers, officials,
employees and volunteers are to be covered as additional insureds on the CGL
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policy with respect to liability arising out of work or operations performed by or on
behalf of Consultant including materials, parts, or equipment furnished in
connection with such work or operations. CGL coverage can be provided in the
form of an endorsement to the Consultant’s insurance (at least as broad as
Insurance Services Office Form CG 20 10 11 85, or if not available, through the
addition of a combination of (1) CG 20 10, CG 20 26, CG 20 33, or CG 20 38
and (2) CG 20 37).
b. Primary Coverage: For any claims related to this Agreement, the Consultant’s
insurance shall be primary coverage at least as broad as Insurance Services Offices
Form CG 20 01 04 13 as respects the City of Santa Monica, its officers, officials,
employees and volunteers. Any insurance or self-insurance maintained by the City
of Santa Monica, its officers, officials, employees or volunteers shall be in excess of
the Consultant’s insurance and shall not contribute with it.
c. Notice of Cancellation: Each insurance policy required herein shall state that
coverage shall not be cancelled except after notice has been given to the City of
Santa Monica.
d. Waiver of Subrogation: Consultant hereby grants to the City of Santa Monica a
waiver of any right of subrogation which any insurer of said Consultant may acquire
against the City of Santa Monica by virtue of payment of any loss. Consultant agrees
to obtain any endorsement that may be necessary to affect this waiver of
subrogation, but this provision applies regardless of whether or not the City of Santa
Monica has received a waiver of subrogation endorsement from the insurer.
Self-Insured Retentions
Self-insured retentions must be declared to and approved by the City of Santa Monica. The
City of Santa Monica may require the Consultant to purchase coverage with a lower
retention or provide satisfactory proof of ability to pay losses and related investigations,
claim administration, and defense expenses within the retention. The policy language shall
provide, or be endorsed to provide, that the self-insured retention may be satisfied by either
the named insured or City of Santa Monica.
Acceptability of Insurers
Insurance is to be placed with insurers authorized to conduct business in California with a
current A.M. Best rating of no less than A:VII, unless otherwise acceptable to the City of
Santa Monica.
Claims Made Policies
1. If the Professional Liability policy provides “claims made” coverage:
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a. The Retroactive Date must be shown and must be before the date of this Agreement
or the start of work.
b. The insurance must be maintained, and evidence of insurance must be provided
for at least 5 years after completion of work.
c. If the policy is cancelled or not renewed, and not replaced with another “claims
made” policy form with a Retroactive Date prior to the effective Agreement date,
the Consultant must purchase “extended reporting” coverage for a minimum of 5
years after completion of work.
Verification of Coverage
Consultant shall furnish the City of Santa Monica with original certificates and amendatory
endorsements (or copies of the applicable policy language effecting coverage provided by
this clause). All certificates and endorsements are to be received and approved by the City
of Santa Monica before work commences. However, failure to obtain required documents
prior to the work beginning shall not waive the Consultant’s obligation to provide them.
The City of Santa Monica reserves the right to require complete, certified copies of all
required insurance policies, including the endorsements required herein, at any time.
Failure to Maintain Insurance Coverage
If Consultant, for any reason, fails to maintain insurance coverage which is required
pursuant to this Agreement, the same shall be deemed a material breach of contract. The
City of Santa Monica, at its sole option, may terminate this Agreement and obtain damages
from the Consultant resulting from said breach.
Subcontractors
Consultant shall require and verify that all subcontractors maintain insurance meeting all
the requirements stated herein. All exceptions must be approved in writing by the Risk
Manager.
Footnotes
# 1: Workers’ Compensation insurance coverage is not required if the Consultant does
not have employees. The Consultant must, however, execute the City’s Workers’
Compensation Coverage Exemption Declaration Form.
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1
FIRST MODIFICATION OF AGREEMENT NO. 108300 (CCS)
This First Modification of Agreement Number 108300 (CCS) (“First Modification”),
entered into as of _________________(“Execution Date”), by and between the City
of Santa Monica, a municipal corporation (“City”), and HR&A Advisors, Inc
(“HR&A”) is made with reference to the following:
RECITALS
A. On or about November 23, 2020, the City and HR&A entered into Agreement
Number 108300 (CCS) for professional services to support drafting and approval
of the pending Housing Element Update (“Original Agreement”).
B. The City and HR&A desire to modify the Original Agreement to extend the con-
tract term, include additional services to be performed by HR&A, and increase the
contract price to pay for those additional services.
TERMS AND CONDITIONS
Now, therefore, the undersigned parties do hereby mutually agree to modify the Origi-
nal Agreement as follows:
1. Section 1 of the Original Agreement entitled “Term” shall be deleted in its entirety
and replaced with the following paragraph:
Term. This Agreement begins on the Execution Date and terminates
on June 30, 2022, unless terminated earlier as set forth in the Original
Agreement or extended by the parties in writing.
2. Section 2 of the Original Agreement entitled “HR&A Services” shall be modified
by adding the following paragraph:
Additional Services. HR&A will perform all of the additional services
(“Additional Services”) described in Exhibit A-1, Scope of Services and
Budget. HR&A will complete the Additional Services in accordance
with Exhibit A-1.
3. Section 4 of the Original Agreement entitled “Compensation” shall be modified
by adding the following paragraph:
Compensation. The City will compensate HR&A for the Additional
Services in an amount not to exceed $39,900.00, as set forth in Exhibit
A-1. The total contract price for services pursuant to the Original
Agreement and this First Modification shall not exceed $258,900.00.
4. Exhibit A-1 is attached hereto and incorporated herein by this reference.
DocuSign Envelope ID: C2B2F9C2-38F8-400B-ABC8-B4117AA919C5
8/10/2021
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5. Except as expressly modified by this First Modification, all other terms and condi-
tions of the Original Agreement shall be and remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this First Modification as of the
date and year first written above.
ATTEST:
______________________________
DENISE ANDERSON-WARREN
City
Clerk
APPROVED AS TO FORM:
______________________________
LANE DILG
City Attorney
CITY OF SANTA MONICA,
a municipal corporation
By: ______________________________
RICK COLE
City Manager
HR&A Corporation
#VENDOR
By: _______________________________
DocuSign Envelope ID: C2B2F9C2-38F8-400B-ABC8-B4117AA919C5
Interim City Attorney
George S. Cardona
8/10/2021
HR&A Advisors, Inc.
Paul J. Silvern, Vice President
8/10/2021
Paul J. Silvern
8/10/2021
John Jalili
Interim City Manager
9/7/2021
City Clerk
Denise Anderson-Warren
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Exhibit A-1
Scope of Services and Budget
DocuSign Envelope ID: C2B2F9C2-38F8-400B-ABC8-B4117AA919C5
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New York | Dallas | Los Angeles | Raleigh | Washington DC
June 7, 2021
via email to: jing.yeo@smgov.net
Jing Yeo
Planning Manager
Community Development Dept. City Hall, Room 212
1685 Main Street
Santa Monica, CA 90404
Re: Additional Services for Housing Element Update Support
Dear Jing:
Per your request, HR&A Advisors, Inc. (HR&A) is pleased to provide a scope and budget for additional
services under Professional Services Agreement #108300 (CCS) entered into as of November 23rd, 2020,
by and between the City of Santa Monica (City) and HR&A, to support drafting and approval of the pending
Housing Element Update. The additional services include feasibility testing to determine whether increased
development standards and/or new affordable housing requirements (i.e., in terms of percentages, unit mix
and affordability levels) can accelerate development of mixed-income housing in R-1 neighborhoods. HR&A
has already engaged John Kaliski Architects (JKA), Danielian Associates, and MGAC as subconsultants using
our contingency as originally budgeted. We are requesting budget authorization to provide this additional
support, along with preparation for and participation in additional public meetings.
The following sections of this letter present HR&A’s proposed additional services and updated budget to
support the City’s Housing Element update.
PROPOSED ADDITIONAL SERVICES
Task 13: R-1 Diagrams (Reimbursement to JKA and Danielian Associates - $9,900)
HR&A will engage John Kaliski Architects and Danielian Architects to develop alternative diagrams
illustrating massing prototypes on typical City of Santa Monica R1 parcels of 7,500 Sq. Ft. in size and
illustrating the immediate neighborhood context. The development programs for each of the alternatives will
be based on program and zoning constraint information developed collaboratively between City staff and
HR&A.
Deliverables: R-1 diagrams and zoning analysis based on eight development scenarios
Task 14: Additional Public Meeting Support
This task is an allowance for HR&A to prepare for and participate in public meetings to present and discuss
the results of HR&A analysis for the Housing Element Update. For budgeting purposes, the schedule and
budget assume two meetings with the Housing Commission, two with the Planning Commission and one with
the City Council, including time to prepare materials for the meetings, contribute to relevant sections of staff
reports and PowerPoint presentations, and participate in the meetings. The schedule for these meetings will
be determined in consultation with City staff.
Deliverables: HR&A presentation briefing materials and, as needed, written comments on companion City staff
presentation.
DocuSign Envelope ID: C2B2F9C2-38F8-400B-ABC8-B4117AA919C5
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HR&A Advisors, Inc. Proposal re: Santa Monica AHPP Update and Housing Element Support | 2
PROPOSED REVISED BUDGET
HR&A will complete the additional services with a revised contract total amount of $258,900 allocated by
task approximately as follows:
TASKS BUDGET
TASK 1: KICK-OFF MEETING 4,000
TASK 2: SPECIFY 24 PROTOTYPES 26,000
TASK 3: UPDATE MARKET ASSUMPTIONS 24,000
TASK 4: BASE CASE AND INITIAL ANALYSIS CASE FEASIBILITY MODELS 50,000
TASK 5: DOCUMENT 100% A.H OPPORTUNITIES AND CONSTRAINTS 5,000
TASK 6: PRELIMINARY RESULTS BRIEFING AND MEETING 8,000
TASK 7: ALLOWANCE FOR FURTHER FEASIBILITY TESTING 24,000
TASK 8: ALLOWANCE FOR REVISED RESULTS BRIEFING 8,000
TASK 9: DRAFT AND FINAL MEMORANDUM REPORT. 12,000
TASK 10: STAKEHOLDER BRIEFINGS 8,000
TASK 11: PRESENTATIONS TO COMMISSIONS & CITY COUNCIL 20,000
TASK 12: COVID-19 UPDATES 15,000
CONTINGENCY (SUBCONTRACTOR SERVICES) 15,000
TOTAL: $219,000
ADDITIONAL SERVICES:
TASK 13: R -1 DIAGRAMS 9,900
TASK 14: ADDITIONAL PUBLIC MEETING SUPPORT 30,000
REVISED TOTAL: $258,900
**********************
We hope you find the foregoing proposal responsive to the City’s needs. Once finalized, we assume City
staff will amend our existing contract with the revised scope of work and compensation.
We can be available to discuss this proposal with you and your colleagues as needed to clarify any issues
or discuss any changes that may be required.
Sincerely,
PAUL J. SILVERN,
Vice President
DocuSign Envelope ID: C2B2F9C2-38F8-400B-ABC8-B4117AA919C5
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CITY OF SANTA MONICA
OAKS INITIATIVE NOTICE
NOTICE TO APPLICANTS, BIDDERS, PROPOSERS
AND OTHERS SEEKING DISCRETIONARY PERMITS, CONTRACTS,
OR OTHER BENEFITS FROM THE CITY OF SANTA MONICA
Santa Monica’s voters adopted a City Charter amendment commonly known as
the Oaks Initiative. The Oaks Initiative requires the City to provide this notice and
information about the Initiative’s requirements. You may obtain a full copy of the Initiative’s
text from the City Clerk.
This information is required by City Charter Article XXII—Taxpayer Protection. It
prohibits a public official from receiving, and a person or entity from conferring, specified
personal benefits or campaign advantages from a person or entity after the official votes,
or otherwise takes official action, to award a “public benefit” to that person or entity. The
prohibition applies within and outside of the geographical boundaries of Santa Monica.
All persons or entities applying or receiving public benefits from the City of Santa
Monica shall provide the names of trustees, directors, partners, and officers, and names
of persons with more than a 10% equity, participation or revenue interest. An exception
exists for persons serving in those capacities as volunteers, without compensation, for
organizations exempt from income taxes under Section 501(c)(3), (4), or (6), of the
Internal Revenue Code. However, this exception does not apply if the organization is a
political committee or controls political committees. Examples of a “public benefit” include
public contracts to provide goods or services worth more than $25,000 or a land use
approval worth more than $25,000 over a 12-month period.
In order to facilitate compliance with the requirements of the Oaks Initiative, the City
compiles and maintains certain information. That information includes the name of any
person or persons who is seeking a “public benefit.” If the “public benefit” is sought by an
entity, rather than an individual person, the information includes the name of every person
who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten percent
interest in the entity. Therefore, if you are seeking a “public benefit” covered by the Oaks
Initiative, you must supply that information on the Oaks Initiative Disclosure Form. This
information must be updated and supplied every 12 months.
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CITY OF SANTA MONICA
OAKS INITIATIVE DISCLOSURE FORM
In order to facilitate compliance with the requirements of the Oaks Initiative, the City compiles
and maintains certain information. That information includes the name of any person or persons
who is seeking a “public benefit.” If the “public benefit” is sought by an entity, rather than an
individual person, the information includes the name of every person who is: (a) trustee, (b)
director, (c) partner, (d) officer, or has (e) more than a ten percent interest in the entity.
Public benefits include:
1. Personal services contracts in excess of $25,000 over any 12-month period;
2. Sale of material, equipment or supplies to the City in excess of $25,000 over a 12-month
period;
3. Purchase, sale or lease of real property to or from the City in excess of $25,000 over a 12-
month period;
4. Non-competitive franchise awards with gross revenue of $50,000 or more in any 12-month
period;
5. Land use variance, special use permit, or other exception to an established land use plan,
where the decision has a value in excess of $25,000;
6. Tax “abatement, exception, or benefit” of a value in excess of $5,000 in any 12-month
period; or
7. Payment of “cash or specie” of a net value to the recipient of $10,000 in any 12-month
period.
Name(s) of persons or entities receiving public benefit:
Name(s) of trustees, directors, partners, and officers:
Name(s) of persons with more than a 10% equity, participation, or revenue interest:
Prepared by: ____________________________Title: __________________________
Signature: ______________________________________ Date: ________________
Email: ____________________________________ Phone: ____________________
HR&A Advisors, Inc.
Candace Damon, Eric Rothman, Danny Fuchs, Shuprotim Bhaumik, Kate Collignon,
Kate Coburn, Kate Wittels, Cary Hirschstein, Andrea Batista Schlessinger, Stan Wall,
Amitabh Barthakur, Paul Silvern, Judith Taylor, Phillip Kash, Bob Geolas, Jeff Hebert,
Derek Fleming, Mason Ailstock, Jamie Dang, Marilyn Taylor
HR&A is a 100% owned by its employees via HR&A Advisors, Inc. Employee Stock
Ownership Plan, and no individual employee has a 10%+ ownership interest
Paul J. Silvern Vice President
Paul J. Silvern Digitally signed by Paul J. Silvern
Date: 2022.06.10 06:12:51 -07'00'06/10/22
psilvern@hraadvisors.com 310-751-3464
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