City Council Meeting: April 10, 2007

Agenda Item: 1-H

To: Mayor and City Council 

From: Andy Agle, Housing and Economic Development Director

Subject: Contract Modification for Comprehensive Housing Services, Inc. for Prevailing Wage Monitoring and Section 3 Compliance

Recommended Action

Staff recommends that the City Council:

1. Authorize the City Manager to negotiate and execute a modification to the professional service agreement with Comprehensive Housing Services, Inc. for prevailing wage monitoring and Section 3 compliance for affordable housing developments and redevelopment projects in an amount not-to-exceed $58,000 for the remainder of FY2006-07 and $245,000 for FY2007-08; and extend the term of the contract to June 30, 2008.

2. Appropriate the budget increases as outlined in the Budget/Financial Impact section of this report.

Executive Summary

On October 12, 2004, the City Council authorized the execution of a contract with Comprehensive Housing Services, Inc. (CHS) for prevailing wage monitoring and Section 3 compliance as required by local, State and federal law in an amount not-to-exceed $300,000 over three years.

An extension of the contract is recommended due to several projects being completed sooner than anticipated and several new projects that are being initiated in the coming months. This extension requires an appropriation of $58,000 that will be reimbursed to the City by the Redevelopment Agency.

Discussion

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.

Currently, seven affordable housing developments are being monitored with another four developments anticipated to commence construction this fiscal year. Additionally, a redevelopment project for seismic retrofit of a downtown parking structure is expected to commence construction. The total need for monitoring services is expected to exceed the proposed contract amendment. However, staff is currently preparing a request for proposals (RFP) to solicit interest from additional firms with expertise in prevailing wage and Section 3 monitoring. The current contractor would continue with current projects, as well as projects commencing construction in the next few months. Projects commencing construction following the RFP process are proposed to be monitored by additional firm(s) procured through that process.

Budget/Financial Impact

The contract amendment requires an additional appropriation to account 01264.555060 subledger 76027 in the amount of $58,000 for FY 2006-07. Budget Authority for FY 2007-08 will be requested in the proposed budget for FY 2007-08. The funds will be reimbursed to the City by the Redevelopment Agency from account 17695.578170 pursuant to the Reimbursement Agreement between the City and Agency.

Prepared by:

Bob Moncrief, Housing Manager

Approved:	Forwarded to Council:
Andy Agle, Director Housing and Economic Development	P. Lamont Ewell City Manager