Item 6-G

Council Meeting: June 22, 1999

Santa Monica, California

To: Mayor and City Council

From: City Staff

Subject: Recommendation to Authorize the City Manager to Execute a Second Modification to Agreement No. 6581 (CCS) with Willdan Associates to Increase the Contract Amount by $500,000 to Continue Administration of the Program Through April 9, 2000

This staff report recommends that the City Council authorize the City Manager to execute a Second Modification to Agreement No. 6581 with Willdan Associates to increase the contract amount by $500,000 to continue administration of the program through April 9, 2000, to and to cover lead-based paint remediation on specified properties.

Background

On December 17, 1996, the City Council authorized the City Manager to negotiate and execute a contract with Willdan Associates to implement the Pilot Low Income Residential Repair Program. The program included three components: 1) lead based paint testing and remediation; 2) home security; and, 3) residential rehabilitation. After successful implementation of the new program, on May 12, 1998 the City Council authorized the City manager to execute a modification to the Agreement with Willdan Associates to extend the term of the Agreement by an additional year through June 30, 1999 and to increase the contract amount by $400,000.

The funding limits and eligibility criteria for this program are summarized in Attachment A. Full grants are offered in cases where the property owner and at least 51 percent of the tenants qualify as low-income or moderate-income. Low-income is defined as 50% or less of the Los Angeles area median income as defined by HUD, and moderate-income is defined as 80% or less of the Los Angeles area median income. Matching grants of 75 percent are offered in cases where 51 percent of the tenants qualify as low income but the property owner does not. For the lead-based paint component, priority is given to Section 8 households with children six years old and under. For the home security component, priority is given to senior citizen households.

Attachment B describes how the $400,000 budget approved by the City Council for the FY 98/99 Program has been used. A total of 101 units in 15 properties have been served under the FY 98/99 Program budget, for an average of $3,210 per unit. Most of the FY 98/99 Program funds have been used for conventional home repairs such as plumbing, roofing, and electrical repairs.

While only 2 percent of the FY 98/99 Program funds were spent on lead-based paint testing and remediation, fifty (50) units were tested for the presence of lead hazards. Lead hazards were found in 16 of these units. Because FY 98/99 Program funds were fully committed and no longer available for remediation, funding for remediation in these 16 units is being recommended as part of the FY 99/00 Program.

Approximately 2 percent of the FY 98/99 Program funds were used for home security improvements in 12 units. Low participation in the home security component of the program is probably the result of the Community Development Block Grant (CDBG) requirement that at least 51 percent of the tenants in a building income-qualify in order to repair even one unit in the building. Given the limited scope and cost of these types of repairs, many property owners and tenants may not consider it worth their while to provide the required income documentation.

Program funds are available citywide. During FY 98/99, 45 percent of the units served were located in the Pico neighborhood, 25 percent were located in Ocean Park, 17 percent were located in Sunset Park, 12 percent were located in the Wilshire/Montana area, 2 percent were located in Mid-Cities, and none were located in the Downtown.

Attachment C provides before-and-after photographs of a sampling of projects served by the program.

As part of the City Proposed FY 99/00 Budget, $500,000 in CDBG funds has been recommended to continue administration of the Low Income Residential Repair Program. This amount represents an increase of $200,000 over the FY 98/99 budget for the Low Income Residential Repair Program. The additional funds are available from MERL Program income and are recommended for several reasons. The demand for the program is high. Willdan has a waiting list of 22 properties containing 126 units. During FY 98/99, the average repair subsidy was $3,300 per unit. Based on this average, if all the properties on the waiting list qualify, repair costs could reach $416,000.

In addition, lead-based paint testing conducted as part of the FY 98/99 program determined that 3 properties including a total of 16 units required remediation. The estimated cost of this remediation is $50,000.

The following chart summarizes the estimated demand already known for FY 99/00:

Type of Repairs	Estimated Cost
Program Waiting List	$416,000
Lead-based paint Remediation	$ 50,000
TOTAL	$466,000

A one-time seminar will be offered to property to provide education about lead-based paint hazards and to market the lead-testing and remediation component of the program. Program Guidelines will be changed to limit the number of contracts let to any single contractor until work under the contract is completed. This should prevent contractor delays which were experienced on some projects during FY 98/99.

The proposed FY 99/00 Budget includes funding of $500,000 in CDBG funds for this program. Funds are available through the following account: 01-620-264-572150.

As required by HUD, a separate recommendation will be presented to the City Council on June 22, 1999 to approve the Proposed FY 99/00 One Year Action Plan to allocate $500,000 in CDBG funds to the Low Income Residential Repair Program.

Staff recommends that the City Council authorize the City Manager to execute a Second Modification to Agreement No. 6581 (CCS) with Willdan Associates to increase the contract amount by $500,000 to continue administration of the Low Income Residential Repair Program through April 9, 2000, contingent on passage of the proposed FY 99/00 Budget.

Prepared by:

Jeff Mathieu, Director of Resource Management

Bob Moncrief, Housing Manager

Tad Read, Housing Coordinator

Attachments: A - Program Guidelines Summary Table

B- Use of FY 98/99 Program Funds

C - Before-and-After Photographs of Properties Served by Low Income Residential Repair Program

Use of FY 98/99 Program Funds

This Attachment describes how the $400,000 budget approved by the City Council for this program for Fiscal Year 1998/99 has been used.

as of 6/10/99

The disproportionate use of program funds for moderate rehabilitation--as opposed to lead-based paint testing/remediation and home security--is a result of a strong demand for repairs of major building systems such as roofing, plumbing, and electrical systems.

While only 2 percent of the FY 98/99 Program funds were spent on lead-based paint testing and remediation, fifty units were tested for the presence of lead hazards. Lead -based paint hazards were found in 16 of these units. Because FY 98/99 Program funds were fully committed and no longer available for remediation, funding for remediation in these 16 units is being recommended as part of the FY 99/00 Program.

Low participation in the home security component of the program is probably the result of the Community Development Block Grant (CDBG) requirement that at least 51 percent of the tenants in a building be qualifying low-income households in order for even one unit in the building to receive funds for home security improvement or other repairs. Given the limited scope and cost of these types of repairs, many property owners and tenants may not consider it worth their while to provide the required income documentation.

With City Council approval of the Low Income Residential Repair Program in December, 1996, program funds were made available to qualifying low-income households citywide. Table II shows the number and percentage of properties served by the FY 98/99 program by neighborhood.