Title
Recommendation to Approve a 36-month Services Agreement between the City of Alameda and the Housing Authority for $1,152,116 (FY 2017-18, with 3% annual adjustments for FY 2018-19 and FY 2019-20) to Administer the Rent Review, Rent Stabilization and Limitations on Evictions Ordinance as Amended for the City of Alameda. (Rent Stabilization 265)
Body
To: Honorable Mayor and Members of the City Council
From: Jill Keimach, City Manager
Re: Recommendation to Approve a 36-month Services Agreement between the City of Alameda and the Housing Authority for $1,152,116 (FY 2017-18, with 3% annual adjustments for FY 2018-19 and FY 2019-20) to Administer the Rent Review, Rent Stabilization and Limitations on Evictions Ordinance as Amended for the City of Alameda
BACKGROUND
Following the City Council’s adoption of the Rent Review, Rent Stabilization and Limitations on Evictions Ordinance 3148 (Ordinance) in March 2016, the City Council approved an Agreement and two subsequent Amendments between the City and the Housing Authority of the City of Alameda (Housing Authority) for program services and to administer the Rent Stabilization Program through June 30, 2017.
The current Agreement contains a scope of services for the Housing Authority to administer the Rent Stabilization program including staffing to:
a) respond to public inquiries about the Ordinance;
b) create and implement procedures, forms, a website and educational materials and conduct public information trainings/clinics;
c) manage the termination and relocation benefits provisions of the Ordinance; and
d) coordinate the work of the Rent Review Advisory Committee (RRAC) concerning rent disputes.
In addition, the Agreement required the City to issue a Request for Proposals (RFP) for a Program Administrator to administer the rent stabilization program following the program’s first year (see Exhibit 1: Request for Proposals for Program Administrator and Addendum No. 1), and obligated the Housing Authority to submit a proposal. Both the City and Housing Authority were committed to “testing the marketplace” to determine the best service provider at the end of the initial term.
DISCUSSION
City staff issued the RFP on November 23, 2016, following the November election that confirmed the Ordinance with the passage of Measure L1. The RFP was distributed to 15 organizations/consulting firms specializing in housing and related services (see Exhibit 2: RFP Distribution List). Notice of the RFP was also posted on the City’s web site. On December 20, 2016, the City issued an Addendum No. 1 to include additional service metrics, as directed by the City Council at its December 6, 2016 meeting.
The City received two proposals: one from the Housing Authority and one from Sandidge Urban Group, Inc. (SUG) (see Exhibit 3: Proposals for Program Administrative Services). A third organization, Eden Council for Hope and Opportunity (ECHO Housing), considered responding to the RFP but declined citing its Board’s concern that administering a governmental program and making decisions on behalf of the governmental body could compromise its mission as a third party mediator between tenants and landlords and possibly lead to the appearance of impropriety.
Staff formed a review and interview panel composed of representatives from the Community Development Department, the City Attorney’s Office, and two housing experts from other local governments who are familiar with administering these types of programs: Tom Liao, the Deputy Community Development Director for the City of San Leandro, and Michelle Starratt, the Assistant Housing Director for Alameda County’s Housing & Community Development Department.
The panel interviewed the two proposers on January 30, 2017. The panel overwhelmingly felt that the Housing Authority’s proposal was the better choice based on criteria that it took into consideration:
1. Quality of the Proposal
2. Experience of organization providing the services requested and experience of individuals to be assigned in providing the required services
3. Demonstrated success in providing services of a similar nature
4. Realistic budget given the level of services to be provided
The panel agreed that the SUG proposal reflected an insufficient understanding of the comprehensive nature of the rent stabilization program and was non-responsive on some of the major elements of the program. For example, the SUG proposal lacked sufficient staffing capacity and experience. The proposal devoted only ten (10) hours per month for core program services, such as communicating with tenants and landlords and preparing for RRAC meetings. The budget did not identify any costs for case management of termination notices, rent increases, or Capital Improvement Plan submissions. The proposed project manager and primary contact for the contract, who was not present at the interview, has no experience in program administration. Overall, the SUG proposal and team reflected an inadequate understanding of the scope of work and staffing needs for day-to-day Program Administrator activities.
As the incumbent Program Administrator, the Housing Authority presented a highly qualified team that provided a comprehensive proposal with a clear and thorough understanding of the City’s rent stabilization program. The Housing Authority created and implemented a process to carry out all components of the Ordinance and established policies and procedures for the various activities. As a result, the Housing Authority’s staff and senior management have extensive experience dealing with landlord/tenant issues and have developed working relationships with rental housing stakeholders in Alameda.
The review and interview panel unanimously recommended that the City move forward with a three-year agreement with the Housing Authority to serve as the Program Administrator through December 31, 2019, when the Ordinance will sunset unless the City Council affirmatively acts to retain some or all of its provisions. While the Housing Authority’s proposed budget was significantly higher than SUG’s budget, the City did not receive any other proposals-particularly from non-profit organizations with potentially lower staffing costs-to compare budgets and levels of service. The panel concluded that SUG’s much lower proposed budget reflects the proposer’s lack of understanding of the Program. The Housing Authority’s budget reflects the best cost estimate to administer the City’s Rent Stabilization Program while providing a high degree of program service and attention to individual cases.
At its April 7, 2017 meeting, the City Council directed staff to prepare a series of amendments to the Ordinance. Staff has since negotiated with the Housing Authority to ensure that these revisions are incorporated into its scope of work and the proposed Services Agreement (see Exhibit 4: Services Agreement). Based on the RFP process and the panel’s recommendation, staff recommends that the City Council approve a 36-month contract with the Housing Authority to administer the Rent Stabilization Program.
FINANCIAL IMPACT
The Service Agreement is for three years with a 3% annual adjustment starting with FY 2018/19.
In June 2016, staff recommended that the City Council fund the Rent Stabilization Program through a program-based fee. At that time, the Council voted to pay for the first year of the Program with General Fund reserves. Council wanted to better understand the cost of the Program before considering a fee and requested that the item be brought back after more data on the Program and the cost to administer it were known. At the April 7, 2017 meeting, the City Council authorized staff to prepare and present a revised fee study to fund the Ordinance at its June 6, 2017 meeting.
In the event that a Program Fee is not adopted for the next fiscal year, there will be substantial cost to the General Fund. It is anticipated that the cost of implementing the program, including the Program Administrator and City Attorney costs, will be approximately $1.6 million annually. This cost has not been incorporated into the current General Fund projections.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The Services Agreement continues to provide administrative services consistent with the City’s Rent Review, Rent Stabilization and Limitations on Evictions Ordinance as amended.
ENVIRONMENTAL REVIEW
Approval of a Services Agreement is not subject to environmental review because it is a governmental fiscal activity which does not involve any commitment to a specific project which may result in a potentially significant physical impact to the environment and therefore it is not a project under the California Environmental Quality Act. CEQA Guidelines, section 15378(b)(4).
RECOMMENDATION
Approve a 36-month Services Agreement between the City of Alameda and the Housing Authority of the City of Alameda for $1,152,116 (FY 2017/18, with 3% annual adjustments for FY 2018/19 and FY 2019/20 to administer the Rent Review, Rent Stabilization and Limitations on Evictions Ordinance for the City of Alameda.
Respectfully submitted,
Debbie Potter, Community Development Director
By,
Eric Fonstein, Development Manager
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. Request for Proposals for Program Administrator and Addendum No. 1
2. RFP Distribution List
3. Proposals for Program Administrative Services
4. Services Agreement