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Item 5 - Award of Bid for Poway Royal MH Park Sewer Improvements Project TO: FROM: INITIATED BY: DATE: SUBJECT: AGENDA REPORT SUMMARY Honorable Mayor and Members of the City Council Honorable Chairman and Members of the Redevelopment Agency James L. Bowersox, City Manager/Executive Dire~ Niall Fritz, Director of Development Services p?' February 22, 2005 Award of Bid for the Poway Royal Estates Mobile Home Park Sewer Improvements Project (#5955) - Bid No. 05-009 ABSTRACT Bids were opened on January 25, 2005 for the Poway Royal Estates Mobile Home Park Sewer Improvements Project, located on Estrella Vista Way and Dana Vista Way in the Poway Royal Estates Mobile Home Park in the City of Poway, The contract time for this project is 25 working days. The engineer's estimate for this project is $5,000 to $8,000. - ENVIRONMENTAL REVIEW This item is not subject to CEQA review. FISCAL IMPACT There are sufficient funds in the project budget (#5955D) for the award of this contract. ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE Tri-Group Construction and Development Inc., 13943 Poway Road, Suite B, Poway, CA 92064. RECOMMENDATION It is recommended that the City Council/Redevelopment Agency award the Poway Royal Estates Mobile Home Park Sewer Improvements Project (#5955) to Tri-Group Construction and Development Inc., the lowest responsible bidder, in the amount of $17,950.00. ACTION . - :\CIP _Development\CIP Admin\Agenda Reports\2005 Reports\5955 Poway Royal Sewer Improvements\022205_Award Poway Royal_sum.doc 10f3 February 22, 2005 Item # S CITY OF POWAY AGENDA REPORT This report is included on the Consent Calendar. There will be no separate discussion of the report prior to approval by the City Council unless mem~ of the Council. staff or public request it to be removed from the Consent Calendar and discussed separately. If you wish to have this report pulled for discussion, please fill out a stip indicating the report number and give it to the City Clerk prior to the beginning of the City Council meeting. FROM: Honorable Mayor and Members of the City Council Honorable Chairman and Members of the RedEW:I~~ent Agency James L. Bowersox, City Manager/Executive Dire~ Niall Fritz, Director of Develo~t services? Javid Siminou, City Engineer. J. Bradley Kutzner, Assistan ity Engineer,~ February 22, 2005 TO: INITIATED BY: DATE: SUBJECT: Award of Bid for the Poway Royal Estates Mobile Home Park Sewer Improvements Project (#5955) - Bid No. 05-009 BACKGROUND The Poway Royal Estates Mobile Home Park Sewer Improvements Project is located on Estrella Vista Way and Dana Vista Way in the Poway Royal Estates Mobile Home Park in the City of Poway. The contract time for this project is 25 working days. The engineer's estimate for this project is $5,000 to $8,000. FINDINGS Bids were opened on January 25, 2005. The following two bids were received: Name of Com an Tri-Grou Construction Khavari Construction, Inc. Bid Pro osal Amount $17,950.00 $27,777.00 Projects of this type (working in and around the back yards of mobile homes), are very difficult to estimate. With these two bids, it is clear that the estimate was not in line with current market conditions. Since this project addresses ongoing sewage spills (as recent as late January 2005), staff feels it is appropriate to accept this bid and move forward with the corrections, rather than delay the work to re-bid it. There is no indication that a re-bid would provide a reduced cost. 20f3 February 22, 2005 Item # 5 Agenda Report February 22, 2005 Page 2 ENVIRONMENTAL REVIEW This item is not subject to CEQA review. FISCAL IMPACT There are sufficient funds in the project budget (#5955D) for the award of this contract. ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE Tri-Group Construction and Development Inc., 13943 Poway Road, Suite B, Poway, CA 92064. RECOMMENDATION It is recommended that the City CounciVRedevelopment Agency award the Poway Royal Estates Mobile Home Park Sewer Improvements Project (#5955) to Tri-Group Construction and Development Inc., the lowest responsible bidder, in the amount of $17,950.00. JLB:NF:JS:JBK:vm M:\CIP _Development\CIP Admin\Agenda Reports\2005 Reports\5955 Poway Royal Sewer Improvements\022205_Award Poway Royal_Rpt.doc 30f3 February 22, 2005 Item # 5 Mayor Cafagna, City Council ,~.....t...rs, ladies and gentlemen of city government, my name is Sherry Wilks and I am a resident of Poway Royal Mobile Estates. In the May 2003 issue of HOUSING AND COMMUNITY DEVELOPMENT NEWS City Manager, James Bowersox said that the City of poway purchased three mobile home parks (in the late 1980's and early 1990's] with the intention of stabilizing rents on affordable housing. He went on to say "the council knew that keeping rents low would mean operating the parks at a loss. The council made a conscious decision that it was more important to preserve the housing opportunity for the people living there than to contribute to the cost of maintenance and operation of the park. " In 1999, Poway decided it was time to get out of the low-income housing business. One step toward that goal was the sale of the Poinsettia Family and Senior Mobile Home Park to Wakeland Housing in 2003. Although the city sold the park for a fair market value of 14.5 million dollars, the sale was not such a good deal for the city or the park residents. In order to make the sale, in Mr. Bowersox's words, a "financial success" Poway gave Wakeland a very nice interest rate for the first 5 years of the loan - zero percent. At today's rate of 5.5%. that is almost 4 million dollars. poway also gave Wakeland Housing a 4.8 mlUion dollar "second mortgage" from proceeds of a 10 mlUion dollar, 20 year, and 5 percent bond. That is 10 million dollars in interest that Poway has to pay. Really, we all know, that is a 10 million dollar burden that will eventually find its way to the residents of the Poinsettia (Family and Senior IIobile Home] Parks. Ladies and gentlemen, we the residents of Poway Royal Mobile Estates have submitted a proposal to the City of Poway to purchase our park. This proposal does not ask the city to hold a 35-year mortgage. We are not looking for interest-free loans. We do not need the city's help for this to be a "financial success." This proposal is an all-cash deal. We believe it is the only proposal that ensures housing costs for the existing residents will indeed remain stable for as long as they continue to live in the park. If this really is Poway's desire then there can be no option except to approve the sale of poway Royal (lIobile Estates] to its residents. Volume 13, Number 5 May 2003 Making Ends Meet The cost of living in San Diego continues to grow beyond the means of working families who help operate our local economy. Unless we begin to consider new strategies to fight the crisis of working poverty, the current economic downturn will further exacerbate San Diego's affordability crisis. In previous studies, the Center on Policy Initiatives (CPI) looked at the kinds of jobs our economy was creating and whether those jobs and wages were ad- equate to support working families. This new study of San Diego looks at !he o!her side of a families' financial Table of Contents Making Ends Meet ......................................................1 Federation News .........................................................3 Brown Bag Lunch ................................................,...3 COC Failures, Downsizings and Mergers .................3 Around the County Three New Acquisition-Rehab Developments ..........5 City Council to Review Homeless-Aid Policies ........6 Poway agrees to sell 2 mobile-home parks ............. 6 North County Apartment Rates up 2.8 Percent ....... 7 Around the State HCD Releases CalHome Program Draft Regulations .... 8 Proposed Uniform Multifamily, MHp, HOME & JSJFWHG Regulations .............................................8 Affordable Housing Exhibit ...................................... 9 U.S. Supreme Court Endorses Referendums ........... 9 HUD Releases FY 2003 SuperNOFA ........................ 9 The Community Development Trust and Fannie Mae Announce $100 Million Investment .....10 Calendar of Events ....................................................11 . situation - !he rising costs of basic needs !hat define a decent standard of living in San Diego. The CPI looks at the real cost of living for various family types and calcu- lates !he wages that woIkers need to make in order to support their families' basic needs. By all accounts, the costs of basic family needs in San Diego are rising rapidly and making it increasingly difficult for working families to make ends meet. Rising costs of housing and utilities have led to San Diego being the 8th most expensive place to live in the nation. In San Diego CODllty, a worker eamingminimmn wage ($6.75 per hour) would have to work 125 hours per week in order to afford the 2003 Fair Market Rent of $1,095 for a two-bedroom apartment. Determining a family's basic needs has sparked many debates in the United States over the decades. The "poverty line" is the most commonly used, but not univer- sally accepted, measure !hat describes !he imaginary line between families that are making ends meet and those that are not. The current measure of poverty in the United States is the Census Bureau's Federal Poverty TItreshold, first developed in 1963-64 by Molly Orshansky of !he Social Security Administration. Using a 1955 survey that found that households typically spent one-third of their budgets on food, and using the Department of Agriculture's Economy Food Plan, Orshansky calculated poverty thresholds for various family sizes by taking the economy food plan for a given family size and multiplying it by three. The government has made no changes to this fonnula since its inception, except for adjusting it based on the average increase in consumer prices. Poverty numbers from the 2000 Census shows that approximately 9% of San Diegans live below the poverty .continued on next page AROUNDTHECOUNTV Parlcside Apartments ...continued from previous page Helping celebrate the day, again, was Councilmen1ber Charles Lewis joined by the Housing Commission CEO Betsy MOITis and other commission representatives. SoCal Housing's John Seymour (director, San Diego Division) and Rebecca Clark (executive director) were there, aloug with La Quetta Bush-Simmons, executive director of Hope Through Housing Foundation (HOPE). As the nonprofit partner that will provide community service programs at Parkside's new onsite community resource center, HOPE will provide residents with after-school tutoring and career development services, along with computer stations, parenting and community organizing classes. In addition to the Housing Commission, other funding partners for Parkside Apartments included Related Capital Company and California Community Reinvestment Corp. City Council to Review Homeless- Aid Policies The San Diego City Council plans to review its policies on shelter, housing and assistance for homeless people. The city manager's staff will form a Homeless Advisory Committee for the council and a Sitting Guidelines Task Force to help the city draft new rules for agencies that want to establish homeless services facilities. Forming the committee and task force were among a list of recommen- dations in a report by the Homeless Services Program Task Force. Also among the recommendations were expanding housing options for low-income families and the physically disabled. The task force said housing should not he consid- ered affordable unless rent does not exceed 30 percent of a household's income. The Task Force's recommendations will be studied by city staff, which will determine the cost. The recommenda- tions will then be sent to the council for consideration. Recognizing that many of the recommendations will require additional money, the task force suggested pursuing local, state and federal funds. The task force was made up of representatives of homeless services organizations, city police and city administrators. The group was co-chaired by SistEr RayMonda DuVall of Catholic Charities and John Thelen of the Regional Task Force on the Homeless. Poway agrees to sell 2 mobile- home parks Wakeland Housing will soon buy two of the three mobile-home parks the City of Poway owns. The Poway City Council voted 4-0, with Councilman Don Higginson absent, to sell the Poinsettia Family Mobile Home Park and Poinsettia Senior Mobile Home Park for $14.6 million. The city bought the parks in 1988for$10 million. City Manager Jim Bowersox called the vote a "mo- mentous occasion," saying the council was taking a major step toward a 4-year.old goal of selling three mobile-home parks and one park of modular homes purchased in the late 19808 and early 19908. The city bought the parks with the intention of stabiliz- ing rents on affordable housing. The council knew that keeping rents low would mean operating the par!'" at a loss, Bowersox said 'The council made a conSCIOUS decision that it was more important to preserve the housing opportunity for people living there than to contribute to the cost of maintenance and operation of the park," he said. New tenants at the parks pay higher rent than existing tenants, bringing increased rent income over time. The council planned to keep the parks until the rent income covered operating expenses and payments on the purchase debt, Bowersox said That happened last fiscal year. The two parts cost $884,790 to operate in fiscal year 2001-02, and the annual debt payment was $954,410, while the revenue from rents and utilities was nearly $1.8 million. In 2000, the city sold Haley Ranch Estates, a commu- nity of factory-built modular homes, to Community HousingWorks, an Escondido-based nonprofit group. It plans to sell Poway Royal Mobile Estates when its rent income catches up with its costs in about 10 years. Wakeland Housing is committed to purchasing the Poinsettia parks, which have a total of 262 spaces, and Irvine-based Newport Pacific will manage them. The deal is expected to close about May 21. Wakeland owns nine affordable-housing communities throughout Southern California as well as in Santa Maria and Seattle. Newport Pacific manages 55 mobile-home communities in California, Arizona, Colorado, Nevada, Texas, Idaho and Wyoming. The purchase agreement for the Poinsettia parks requires Wakeland to continue the existing rent structure, maintain and improve the condition of the parks and involve residents in the transition. Wakeland is paying the market price, but to help assure the parks' financial success, it worked out a financing plan with the city that gives it a lower intErest rate and payments that don't start for three years. - iJW.- rwf~~ ~. February 22, 2005 To the members ofthe Poway City Council I am asking for the opportuuity to purchase my little bit of heaven in the city of Po way, I would prefer to be here in person but I am unable to since I am working, I am a minority in this town, meaning that I am one of a handful of current residents that have actually grown with this town. I have lived in Poway since the age of 3 when my parents moved here in 1961. I went to Garden Rd School and graduated from Poway High, I worked for a small business here in Poway for over 20 years, In 1980 I voted for Poway to become a "city in the country," Due to other financial obligations and the price of owning a home in Poway, I have never been in the position to purchase a "real" home in my own hometown, 11 years ago I was able to purchase a manufactured home in the Poway Royal Mobile Estates. Now, all of you are in a position to make it possible for me to purchase the land under my home. This would be a dream come true". that I could own a "real" home (home + the land) in the city I grew up in, in the city that has been my home for 45 years, Without this opportunity I worry that as prices climb at an uneven rate with my salary I will no longer be able to afford to live in Poway. If you grant us the opportuuity to purchase our land, I will have the opportunity to stay with out the incredible increase of our rent. Poway is my home. I love it. Please help me to own a little bit heaven in my city, Thank you for your time, Lori Rethoret d~ -.JJ iI1JJ* ~-~~ . General Meeting February 16, 2005 The Solution is Simple All the City of Poway needs to do is DEFER the bond sale and the plan to give the Park away to a management company and let the Homeowners have the opportunity to purchase their own lot - they already own their homes, Everyone wins!! We have presented the City with a simple solution - Let's see how complicated the City of Poway is going to make it! Here's a quick look at what the City is trying to get away with: Per Month/Per Space Operating Expenses $ 1,491,261 $ 311,46 Replacement Reserves $ 39,900 $ 8,33 Total Expenses $ 1,531,161 $ 319.79 Debt Service Series A Bond $ 1,592,411 $ 332.58 Series B Bond $ 415,412 $ 86,76 Series C Bond $ 841,967 $ 175,85 Total Debt Service $ 2,849,790 $ 595,19 Trustee Fees $ 3,500 $ 0,73 Rating Agency Fee $ 10,000 $ 2.09 Issuer Fees $ 25,000 $ 5,22 Resident Services Fees $ 37,080 $ 7,74 Asset Management Fees $ 37,080 $ 7,74 Total Fees $ 112,660 $ 23.53 Total Expenses $ 4,493,611 $ 938,52 Current Avg Rent $ 651,00 Debt per month ($287,52) Yes, you read that correctly, $938.52 (when taxes are added $1001.52Ifor each of our spaces every month! By the City's figures they must increase our rents or continue into bankruptcy/insolvency. Bonds have a lot of added fees and expenses,. .euess who eets to pav them! Debt Service Bond Totals 35 year Inerest Annual Payment Monthly Payme Series A Bond $ 23,188,226.00 6% $ 1,592,411 $ 332,58 Series B Bond $ 5,400,432,00 7% $ 415,412 $ 86,76 Series C Bond $ 9,848,709,00 8% $ 841,967 $ 175,85 Total Debt Service $ 38,437,367.00 $ 2,849,790 $ 595.19 ALL RENTS will be renegotiated after Dec. 31st, 2007 eliminating the current rent structure and the 3% to 5%% cap on rent increases. Don't be fooled, the third party management company WILL NOT keep the rents at the current level. The real question is do we all want to spend $1001.52 per month with no caps on increases or do we want to have a steady mortgage of $655.60 including the Homeowners Fees. The Citv is not interested in YOU!! The City needs to cover its mismanagement of this Park by passing the debt to us and giving it away before we find out... The sounds of San Diego!! The News Publication of Poway Royal Mobile Home Owner's Purchasing Committee Ihusbands@powayroyal.com 858-513-7828/ Morrieitzkowitz @powayroyal.com www.powayroyal.com ijJ..~ Issue 9 February 21, 2005 History of Greed and Waste Years ago homeowners wanted to buy Poway Royal for $15 million (with improvements to be made by the sellers) and asked the City for financial help. The City bought the Park in the interest of the residents. The City, in all its wisdom (?) paid $21 million for the Park with NO improvements from the sellers. Hold on. it f!ets better! The City then floats an overvalued bond on the Park for $28.3 million with the intent of raising rents 5% every year to make up for this outrageous waste of money and mismanagement. Then the Homeowners sued the City for this negligence and abuse. After losing seven times, the City settled, made improvements to the Park and had to change the rent structure. Those improvements should have been done before the City bought the Park not after, at our expense The City has lost money on this Park every year because it couldn't raise the rents, utility fees, and storage fees fast enough to offset their over financing of our Park, Here's the City of Po way's Game Plan: 1. Bring in Wakeland at $14.300.00 a month to manage the Park. Homeowners asked why so many layers of fat? We don't care-we have a game plan. 2. We will do like we have done at Poinsettia Park and slip the ownership over to Wakeland -- nobody will notice. We'll just keep lying to the homeowners that we would like to see them own the Park, 3. With our working partner, Wakeland purchasing the Park, we'll get a low income and affordable housing designation and that helps us meet our state mandated housing requirements. That means we can get more state funds. It keeps us working and spending more. We love it. 4. We'll get an appraiser to overvalue the Park, as before, and issue more bonds. We don't have to follow the Appraisal lnstitutute's guidelines for determining values like everyone else - we're the City. This time we'll go for $37.2 million, This way we can pocket $10 million and make up for our waste and mismanagement. Who cares if the Homeowners have to continue to pay for our abuse? 5. This still isn't enough, we'll also take the $millions in reserve funds paid by the homeowners. Heck they'll never know, people living in trailer parks aren't very bright any way. 6. Let's see now -- We are getting more state money, we are making a killing on the selling price. we are taking the reserve accounts and with 399 units going toward our state mandates, we are heroes. We can go back to our gated communities and relish in the idea of Social Engineering at its finest without it affecting our own personal lives. 7. What's this!!! The homeowners figured out what it's going to cost them. How can we convince the owners that paying $1001.52 per month and renting is affordable housing? We don't care if they can own their property for $655.50 per month and will remain the same for the next thirty years. We know what's best for these people. We have their interest at heart. 8. We're not worried, our buddy Wakeland, who has not a dime invested, will rescue us. They'll be responsible for raising the rents and planting the flowers and the cutesy programs while the termites are eating the buildings, sidewalks are lifting out of the ground, midnight towing is running wild and other real problems go untouched. 9. But we at the city will go off into the sunset writing our pamphlets and brochures on how marvelous a job we've done for the Homeowners of Poway Royal. The News Publication of Poway Royal Mobile Home Owner's Purchasing Committee Ihusbands@powayroyal.com 858-513-7828/ Morneitzkowitz @powayroyal.com www.powayroyaI.com Health and Safety Hello, my name is Dallas Hayden and I am a resident of Po way Royal Estates. I am a board member on ihe Homeowner's Association and 1 am also on the Poway Housing Commission. I am here tonight to discuss the numerous health and safety issues at Poway Royal. In preparation for the sale of the park, the city commissioned an inspection of the Park and in the inspection, several health and safety issues were missed. Before 1 explain these issues, let me give you my qualifications. I have 20 years experience in the construction industry. 1 am a certified Home Inspector and am certified in Mold Survey and Sampling. 1 have worked on several construction class action lawsuits. Now to the health and safety issues that 1 have documented at Poway Royal. List Problems: S-tr- fllTfJdlt-D P;:6E /lVf) p'c-'/tlLrS Riff) /IJ j qLlf/1t (; L'-A//d.uS. These are serious problems the residents must deal with on a daily basis. These problems are due to the mismanagement by the City and Wakeland. While they are concentrating on the aesthetics of the park, the resident's health and safety is being put at risk. There are no complaints because the general public is not trained to notice the signs associated with this problem. The residents trust those who are in charge and here is a case where those that are in charge are not fulfilling there obligations. Here is another reason why selling to a third party would be detrimental to the residents. A non-profit organization will concentrate on programs for the residents. But when these programs are held in buildings with environmental hazards are they really benefiting the children and seniors? Or instead by ignoring these hazards are the residents being put in hann's way? The only way to get rid of these problems will be to hire professional companies. And the only way to guarantee that the resident's health and safety will be guaranteed is if you let the residents purchase the park Thank you. /- 8" CI7~fi c./o 53~i:> mold 9-1(. CO~N'A WI+( .JA~VDk/ ~hl. C/~j::J cU R0.6F ]),RA,~>/;2oor /&,4/(- C~5ED wl.t?'~5 /7--,JLJ /CNN/5 ~~7'5 ~XfJC6cf) w/R,uj' - T~tp !JAZr1..ei:/S '?!J115"c c;J JJ78J..J5 <8A- rh DCXJR. WUJ!-' -I c..lo5 ~ hST/J MUPi:>RY /"2d,ffJ -j:?OGJ?' J)'€'R/JU ':i - ~F/cAj( d~/-h'ph6t- ~)j<:JY C/'IIc/R~AJj .pC>o! /fl/lSE / /lh-Js -&//1 jJc:4D/ 6AT~ WLJ~/~ C/.o5E " 7J: I P 1;.B';?/9Li~ /..U 17/ cl2 7:>Rm/l6 e ~6'-d2i- ~,q5C 1 Ch6 )lLX/~ hl2€:. C:;J<.d dODR v..hP~7 cY7e;~ - /;?~ "J/lc:A/2/.) -I-c~m, rc D/tI?)r9c;:..c: ~ ~ (") ~ 0 [[ a [c8 ~ ~ ~ (J: 8 ~ 84 ~ -= ~ . 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