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Item 14 - Ammnd to Contract Agreement w/Comprehensive Housing Svs r- AGENDA REPORT SUMMARY _ , - '1.'0: Honorable Mayor and Members of the City Council Honorable Chairman and Members of the Redevelopment Agency FROM: James L. Bowersox, City Manager/Executive Dire~ INITIATED BY:...-...John D. Fitch, Ass i stant City Manager /Assi stant Execut i ve Di rector ~~arren H. Shafer, Director of Redevelopment Services Kris Gridley, Redevelopment Coordinator~ DATE: August 23, 1994 SUBJECT: Amendment to Contract Agreement with Comprehensive Housing Services, Inc. ABSTRACI' This action will amend a previously approved contract between the Redevelopment Agency and Comprehensive Housing Services, Inc. (CHS) in order to revise the hourly billing rate and increase the maximum contract amount from $50,000 to $135,000. CHS, I nc . i s the consulting firm that administers the Redevelopment Agency's Affordable Housing Rehabilitation Loan Program. The proposed changes are recommended because the Agency has received more than four times the number of loan applications originally expected. - ENVIRONMENTAL REVIEW The proposed contract amendment is not subject to environmental review. FISCAL IMPACT No immediate fiscal impact will result from approval of the contract amendment. Funding previously appropriated for the Affordable Housing Rehabil itation Program wi 11 be adequate to cover the costs of the proposed changes. ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE None. RECOMMENDATION It is recommended that the City Council/Redevelopment Agency approve the attached Amendment to the Agreement with Comprehensive Housing Services, Inc. (Attachment 2) which will revise the schedule of hourly rates for consultant services and increase the maximum amount of the contract to $135,000. - ACfION AUG 2 3 1994 ITEM 14 . 1 of 6 ~--------- . AGENDA REPORT CITY OF POW A Y This reJX>lt is included on the Consent Calendar. There will be no separate discussion of the report prior to approval by the City Council unless members of the Council. staff or public request it to be removed fr?~ ~e ~onsent Calendar and discussed separately. If you wish to have this report pulled for discussion, please fill out a slip indIcating the report number and give it to the City Clerk prior to the beginning of the City Council meeting. TO: Honorable Mayor and Members of the City Council Honorable Chairman and Members of the Redevelopment Agency FROM: James L. Bowersox, City Manager/Executive Dire~ INITIATED BY: John D. Fitch, Assistant City Manager/ Assistant Executive Director ~warren H. Shafer, Director of Redevelopment Services ~ Kris Gridley, Redevelopment Coordinator ~ DATE: August 23, 1994 SUBJECT: Amendment to Contract Agreement with Comprehensive Housing Services, Inc. to Increase the Maximum Contract Amount and Revise the Hourly Billing Rate ABSTRACT On December 14, 1993 The City Council/Redevelopment Agency approved a contract with Comprehensive Housing Services, Inc. for administration of the Affordable Housing Rehabilitation Program. This report recommends that the contract be amended to increase the Contract amount to $135,000 and revise the hourly billing rate. These changes are needed in order process the unanticipated volume of applications that have been received during the first year of Program operation. BACKGROUND The Affordable Housing Rehabilitation Program was originally proposed in 1993 as a component of the Redevelopment Agency's Five-Year, Comprehensive Affordable Housing Strategy. At the time the Program was developed, it was estimated that 125 low- and moderate-income households would be assisted over an initial three-year period, with approximately 40 rehabilitation loans being processed each year. This estimate was based on the number of loans processed by other established housing rehabilitation programs operating in the region. Comprehensive Housing Services, Inc. (CHS) was asked to submit a proposal for one year of Program Administration, given the assumption that they would process approximately 40 loans. On December 14, 1993 the Redevelopment Agency approved a one-year contract with CHS, which specified that costs would not exceed $50,000. ACTION: AUG 2 3 1994 rrEM 14 . ' 2 of 6 - - Agenda Report - August 23, 1994 Page 2 The Affordable Housing Rehabilitation Program began receiving requests for applications on February 22, 1994. Within two months CHS had mailed out over 353 applications, received 70 completed applications and qualified 40 households to receive loans. After four months of operation over 400 applications had been mailed out and the Agency determined that new participants would be placed on a waiting list in order to allow CHS to process applications which had already been received. To date a total of 193 loan applications have been received. It is estimated that 132 of the applications will qualify for approval. The Program will have exceeded its original three-year goal of 125 loans within the first year of operation. The Affordable Housing Rehabilitation Program has been very popular with the community. CHS's implementation and administration of the Program has been efficient and smoothly run, even with the unexpected volume of applications. The Agency has been pleased with CHS's ability to adjust their staffing in response to workload and the skill they have demonstrated in coping with a number of adjustments to the Program Guidelines. FINDINGS Given the exceptional volume of applications generated by the Program, CHS's "- original contract maximum of $50,000 is not adequate. The workload has made it necessary for CHS to increase staff time and place a full time Administrative Assistant in the Poway office. The large volume of loans has also increased the fixed or "material costs" for such items as title reports, appraisals, escrow administration and document preparation. Now that the Rehabilitation Program has been in operation for several months CHS has been able to provide staff with data regarding the actual cost of loan processing. They have estimated a total cost per loan of $972.00 (inclusive of labor and material cost). This represents a savings over the original contract assumption which was about $1250 per loan. Given that the average Rehabilitation loan is about 510,000, the cost of labor and materials is approximately 9.7% of the loan amount. This cost is below the minimum established by Federal guidelines which assume at least 10% for administrative costs and allow a maximum of 20% in administrative costs for Rehabilitation Loan Programs funded by Community Development Block Grants. In order to complete the processing of the loan applications which have already been received, the contract with CHS needs to be revised to increase the maximum amount. A contract maximum of 5135,000 would provide for completion of the loans already in the system, allowing a small reserve for additional applications. The hourly billing rate in the contract also needs to be revised. The original rate was a flat 550.00/ hour for consultant time. This was an averaged rate which is no longer appropriate because CHS has created a full time Administrative Assistant position for the Program and increased the hours for the more highly paid position of Construction Manager. In order for staff AUG 2 3 1994 ITEM 14 ~.l 3 of 6 Agenda Report August 23, 1994 Page 3 to accurately monitor the hourly costs for administration of this Program, it is recommended that the Contract be amended to incorporate CHS's actual billing rates as shown on Attachment 1. ENVIRONMENTAL REVIEW The proposed contract amendment is administrative in nature and is not subject to environmental review. FISCAL IMPACT A total of $1,500,000 was previously appropriated for the Affordable Housing Rehabilitation Program. It is estimated that CHS can complete the processing and review of loan applications which have already been received at a per/loan cost of $972.00 and with a total administrative cost not to exceed $135,000. This amount, in combination with the anticipated loan funding, can be expended without the need for any additional appropriation. Due to the phenomenal popularity of the Housing Rehabilitation Program and CHS's efficiency in handling the large number of applications, the appropriated funding will be spent much more quickly than was originally anticipated. In the future, staff will be preparing a report which reviews the overall performance of the Housing Rehabilitation Program and discusses the options for further funding. PUBLIC NOTIFICATION AND CORRESPONDENCE Public notice is not required for this action. There has been no public correspondence regarding this item. RECOMMENDATION It is recommended that the City Council/Redevelopment Agency approve the attached Amendment to the Agreement with Comprehensive Housing Services, Inc. which revises the schedule of hourly rates for consultant services and increases the maximum contract amount to $135,000. ATTACHMENTS 1. Comprehensive Housing Services, Inc., Compensation Schedule 2. Amendment of Agreement for Consultant Services AUG 2 3 1994 . ITEM 14 " 4 of 6 -- - ~, ... CHS 714. X41 . AAII} Comprehensive Housing Services. Inc. Fax 714. X47. J0711 Date: August 4, 1994 To: Kris Gridley, Redevelopment Coordinator From: Marybeth Frazier, Consultant to Poway Redevelopment Agency Subject: Amendment to CHS, Inc. Contract For amendment to our existing contract for administration of the Affordable Housing Rehabilitation Program the information the Redevelopment Agency requested is as follows: Program Manager's billing rate: $50 per hour Program Managers include: Gayle Bloomingdale Marybeth Frazier Donna Wright Administrative Assistant's billing rate: $20 per hour Administrative Assistants include: Cecilia Barandiaran Lorna Navales - Dan Kezar Kira Boss,Bloomingdale Construction Manager's billing rate: $65 per hour Construction Managers include: Joyce DeKreek Lawrence Williamson Upon amendment of the existing contract, these are the various rates the City of Poway Redevelopment Agency can expect to be billed for services. If you have any questions, please do not hesitate to talk with me or Gayle Bloomingdale. We are pleased with the continued success of the Affordable Housing Rehabilitation Program and our association with your organization. Sincerely, ~/il~r~J'~ Marybeth Frazier Consultant 8840 Warner Avenue' Suile 204,F. Fountain Valley. CA. 92708 AUG 23199 AT.;r~HMENT 1 5 of 6 AMENDMENT OF AGREEMENT FOR CONSULTANT SERVICES THIS AMENDMENT is made and entered into this day of , 1994 by and between the poway Redevelopment Agency, a public entity, ("AGENCY") and Comprehensive Housing Services, Inc. ("CONSULTANT"). The parties hereto mutually agree that the Agreement between the parties made and entered on the 14th day of December, 1993, is hereby amended as follows: Paragraph B. and Item 1. under Paragraph B., of page 8 of the Agreement shall be deleted and replaced with the following: B. ComDensation and Reimbursement. Agency shall pay Consultant a fee not to exceed $135,000 per year as compensation for consulting services. Said fee shall include: 1. On-site and off-site Affordable Housing Rehabilitation Program administration services at the following rates: Construction Manager $65.00/hour Program Manager $50.00/hour Administrative Assistant $20.00/hour Said rates shall be fixed for a period of one year, from the date of this amendment, after which time they may be adjusted once annually at the mutual agreement of both parties. All other terms of the Agreement shall remain in effect. CONSULTANT By: Gayle Bloomingdale President, Comprehensive Housing Services, Inc. ~OWAY REDEVELOPMENT AGENCY By: James L. Bowersox Executive Director APPROVED AS TO FORM: ATTEST: Steven M. Eckis, Marjorie K. Wahlsten, Agency Legal Counsel Secretary to the Agency ATTACHMENT 2 AUG 23 1994 1TE1~;! 6 of 6