TO: Mayor and City Council

FROM: City Staff

SUBJECT: Professional Services Agreement with Comprehensive Housing Services, Inc. for Prevailing Wage Monitoring and Section 3 Compliance of Affordable Housing Developments

INTRODUCTION

This report recommends that the City Council authorize the City Manager to negotiate and execute a professional service agreement, for one year with options to renew for two additional years, with Comprehensive Housing Services, Inc. (CHS) for Federal/State prevailing wage monitoring and Section 3 compliance for the Housing and Redevelopment Division’s various affordable housing developments.

BACKGROUND

The California Labor Code, Section 1770, et. seq., and the Davis-Bacon Act and related acts require that contractors assisted with State and Federal funding pay their workers based on prevailing wage rates established and issued by the California Department of Industrial Relations, Division of Labor Statistic, or the U.S. Department of Labor, Wage and Hour Division. The City of Santa Monica Municipal Code Section 7.28.030, Applicability of Prevailing Wage Requirements, states that housing developments financed in whole or in part by federal, state, or local funds shall comply with the applicable Federal or State prevailing wage requirements. The purpose of obtaining a labor compliance firm is to administer the prevailing wage monitoring and Section 3 labor compliance provisions for State and Federally funded developments.

Section 3 is a provision of the Housing and Urban Development Act of 1968, which requires that programs of direct financial assistance administered by the U.S. Department of Housing and Urban Development (HUD) provide, to the greatest extent feasible, opportunities for job training and employment to lower income residents in connection with affordable housing developments in their neighborhood. This provision applies only to housing developments funded with HOME Investment Partnerships (HOME) or Community Development Block Grant (CDBG) funds allocated to the construction phase of the developments.

DISCUSSION

Four affordable housing developments are scheduled to begin construction in Santa Monica over the next six months, while others will not begin construction for over a year. The anticipated developments will vary in size from five units to 44 units and the total construction costs are estimated to range from $16 to $20 million through fiscal year 2006/2007.

In July 2004, staff issued a Request for Proposals (RFP) for labor consulting services. Four firms submitted responses to the RFP and a selection panel consisting of City staff from the Housing and Redevelopment Division of the Resource Management Department reviewed and evaluated the proposals. Of the four bids received one was higher, one was comparable and one was lower than that of the firm being recommended. The selection committee evaluated the bids based on project understanding, experience, references and price. The committee determined that CHS was the most qualified based on the rating criteria and on its experience providing labor-consulting services in Santa Monica and Southern California.

BUDGET/FINANCIAL IMPACT

The cost for the annual scope of work will not exceed $100,000. Funds are available in Account Number 01264.555060. The contract extensions for FY 05/06 and 06/07 at $100,000 per year are contingent upon City Council approval of the budget for each fiscal year.

RECOMMENDATION

Staff recommends that the City Council authorize the City Manager to negotiate and execute an agreement with Comprehensive Housing Services, Inc. for an amount not to exceed $100,000 per year for prevailing wage monitoring and Section 3 compliance for affordable housing developments for one year with options to renew for two additional years.

Prepared by: Jeff Mathieu, Director, Resource Management Department

Bob Moncrief, Housing and Redevelopment Manager

Ron Barefield, Housing Administrator

Donna Rickman, Senior Administrative Analyst