City Council Meeting: April 14, 2009

Agenda Item: 1-D

To: Mayor and City Council

From: Andy Agle, Director, Housing and Economic Development

Subject: Prevailing Wage Monitoring Contracts

Recommended Action

Staff recommends that the City Council authorize the City Manager to negotiate and execute two professional service agreements, in sum not to exceed $250,000, with Comprehensive Housing Services, Inc. (CHS) and with AmeriNational Community Services, Inc. (ACS) for federal/state prevailing wage monitoring and Section 3 compliance for various City-funded affordable housing developments and parking structures.

Executive Summary

To ensure City compliance with local, state and federal prevailing wage regulations, the City relies on experts to monitor construction wages for affordable housing and other construction projects. Staff recommends that the City contract with two qualified firms, Comprehensive Housing Services and AmeriNational Community Services, Inc., to provide these services, in an amount not-to-exceed $250,000 for both contracts.

Background

From May 2009 through June 2010, several affordable housing developments and parking structures projects are expected to be under construction in Santa Monica. These rehabilitation and new construction projects are funded with Redevelopment tax increment, HOME funds, CDBG funds or a combination of these sources.

Local, state and federal regulations require that developments assisted with such funds pay construction workers at established prevailing wage rates and comply with Section 3 labor requirements. The City of Santa Monica Municipal Code Section 7.28.030, the “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 California Labor Code, Section 1770, et. seq., and the federal Davis-Bacon Act require that projects assisted with state and federal funding pay workers prevailing wage rates established and issued by the California Department of Industrial Relations, Division of Labor Statistics and Research, or the U.S. Department of Labor, Wage and Hour Division. Section 3 of the Housing and Urban Development Act of 1968 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 and minority residents in connection with affordable housing developments in their neighborhoods.

Potential ramifications for non-compliance include state and federal entities imposing fines, requiring the City to fund payroll underpayment, and withdrawal of project funding sources. To mitigate these risks on affordable housing and redevelopment-related projects, the City has hired firms that specialize in prevailing wage monitoring for at least 10 years. CHS has held the contract for the past six years.

Discussion

The anticipated construction/rehabilitation projects are the result of recent City Council initiatives to increase the supply of affordable housing and to improve the quality and quantity of downtown parking. Eleven affordable housing projects are anticipated to be under construction, including continued infrastructure improvements at Mountain View Mobile Home Park, nine recently acquired apartment buildings slated for rehabilitation by local nonprofit developers, one affordable housing development currently in construction, and two new affordable housing construction projects. Expected parking construction projects include earthquake retrofitting of Parking Structure 2, façade upgrades to Parking Structures 7 and 8 and potential initiation of the first parking structure reconstruction as part of the Downtown Parking Strategy. The construction monitoring periods for these projects range from nine to twenty-four months from the start of construction. Some projects may begin construction as late as June 2010 with completion not occurring until FY2011-2012. Since funds are expended as construction progresses it is anticipated that the amounts included in the contract will be spent over approximately a three year period.

Contractor/Consultant Selection

In November 2008, staff issued a Request for Proposals (RFP) for prevailing wage and Section 3 monitoring services. Four responses were received. Staff reviewed and evaluated the proposals based on criteria including firm staffing, experience, qualifications, technical skills, fee schedule and references. The staff committee determined that CHS and ACS are the most qualified applicants. CHS and ACS bid at reasonable rates, demonstrated expertise in the field and provided excellent references.

This report requests that Council authorize the City Manager to negotiate and execute two professional service agreements for a total amount of $250,000 for the purpose of prevailing wage and Section 3 monitoring. Hiring two firms assures that the high volume of construction projects is adequately serviced and provides the City with the opportunity to diversify its vendor relationships.

Financial Impacts & Budget Actions

Funds in the amount of $200,000 are available in account number 01264.555060 for the affordable housing project portion of these contracts and funds in the amount of $50,000 are available in account number C170621.589000 for the parking garage portion of these contracts.

Prepared by: Lisa Luboff, Senior Administrative Analyst

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