Title
Recommendation to Authorize the City Manager to Execute a Three-Year Staffing Services Agreement Between the City of Alameda and the Housing Authority of the City of Alameda for $1,294,970 for Fiscal Year 2020-21, $1,376,529, for Fiscal Year 2021-22, and $1,471,870 for Fiscal Year 2022-23, to Administer the Rent Control Ordinance (Ordinance No. 3250) and Implementing Regulations for the City of Alameda’s Rent Program. (Community Development 265)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
The City of Alameda (City) currently has a Staffing Services Agreement (Agreement) with the Housing Authority of the City of Alameda (Housing Authority) to administer the City’s Rent Program. This Agreement will expire on June 30, 2020. Based on the Housing Authority’s successful performance administering the Program, it is recommended that the City Council approve a three-year Agreement with the Housing Authority to administer the Rent Program, starting on July 1, 2020 and ending on June 30, 2023. Under the Agreement, the budget for program administration is $1,294,970 for Fiscal Year (FY) 2020-21. For the following two years, the annual contract amounts are $1,376,529 and $1,471,870 respectively.
BACKGROUND
Following the City Council’s initial adoption of the Rent Review, Rent Stabilization and Limitations on Evictions Ordinance in March 2016, the City Council approved an agreement between the City and the Housing Authority to administer the Rent Program through June 30, 2017. Subsequently, the City issued a Request for Proposals (RFP) for a Rent Program Administrator and the interview panel unanimously recommended that the City select the Housing Authority to continue administration of the program. On June 6, 2017, the City Council approved a three-year contract with the Housing Authority that included a $1,152,116 budget for the first year, with annual adjustments for the two subsequent years. This contract expires on June 30, 2020.
In 2019, the City Council adopted numerous amendments to the Rent Ordinance, which significantly changed the program services provided by the Housing Authority as the City’s Rent Program Administrator, including the following revisions:
• Removed the grounds for a landlord to terminate a tenancy for no cause.
• Tied permanent relocation payments to fair market rents.
• Provided relocation assistance to tenants incurring a rent increase above 10%, who decide to move rather than pay the rent increase.
• Eliminated the Rent Review Advisory Committee’s non-binding review of rent increases for Costa Hawkins-exempt units.
• Eliminated Rent Review Advisory Committee’s binding review for units subject to local rent control and provided in the Ordinance a rent increase ceiling that limits the amount of an annual rent increase to 70% of the percentage change in the Consumer Price Index, with a ceiling of 5% and a floor of 1%.
• Established a petition process for tenants to request a downward adjustment in rent for a reduction in housing services and a process for landlords to request an upward adjustment in rent for a fair return on the property.
• Created a registration requirements for all residential rental units in the City.
• Required relocation payments for tenants who are temporarily displaced.
• Regulated “buyout agreements” by establishing certain procedural and substantive requirements.
• Amended the administrative hearing procedures (in Section 1-7 of the Alameda Municipal Code) to conform to the procedures to be used in petition hearings under the Rent Control ordinance.
These amendments (codified in Ordinance No. 3250) were anticipated to increase program service needs and, consequently, increase program costs. For example, the original program focused on complaint-based review, whereas the current system requires each rental unit to be registered with the City. The work scope for program administration required for the revised Ordinance is reflected in the attached Agreement (Exhibit 1).
DISCUSSION
Staff worked closely with the Housing Authority to draft an Agreement that clearly defines the role of the Rent Program Administrator, meets the needs of both landlords and tenants, and addresses anticipated changes in implementation of the revised ordinance.
The Agreement provides that the Housing Authority will continue to provide program services under the Rent Ordinance and its implementing regulations. In determining the implementation structure and program staffing, the Housing Authority identified the service needs under the Rent Ordinance and calculated the number of hours required to provide each service along with the anticipated volume of inquires/submissions. As the Rent Ordinance is still relatively new, the allocation of hours is estimated for many of the services. For example, the number of tenant and landlord petitions concerning the Program Administrator’s determination of the Maximum Allowable Rent (MAR) is a projected estimate because registration is still on-going and the MAR determinations will be completed only after registration is finalized. Reporting to the City on program outcomes will continue on a monthly basis, along with a comprehensive annual report submitted each September.
The Agreement provides that the City will compensate the Housing Authority on a reimbursement-of-costs basis. The budget for FY 2020-21 is $1,294,970. The Agreement further provides for an annual budget of $1,376,529 in the second year and $1,471,870 in the third year. The annual budget in years two and three reflect adjustments in salaries and benefits, increases in office rent per the lease, and a 3% annual adjustment for other costs to administer the program. The Agreement also sets out the role of the City, including providing legal support for the program as well as retaining the Finance Department’s role of managing the annual fee collection process.
In addition, for the period of April 22, 2020 through December 31, 2020, the Housing Authority will also provide support for the City’s Urgency Ordinance that prohibits evictions arising out of financial impacts due to the COVID-19 pandemic and freezes rent increases for most rental units until the end of the year. Rent Program staff will continue to answer inquiries from landlords and tenants concerning evictions and rent increases and process tenant submissions concerning the same during the upcoming FY.
ALTERNATIVES
• It is recommended that the City Council approve the three-year Agreement with the Housing Authority to administer the City’s Rent Control program as described above.
• The City Council could determine that it does not want to continue with the Housing Authority to administer the City’s Rent Program. Staff recommends City Council provide that direction to staff, including preparing an amendment to the existing Agreement pending the City Council’s approval of a Services Agreement with a different service provider to administer the Rent Program.
• The City Council could decide that the City should administer the program. A minimum of six months would be needed to implement such direction.
FINANCIAL IMPACT
There is a financial impact to the General Fund from the Rent Program in the amount of $78,000 as the City Council has agreed to pay the rent program fee on behalf of landlords who accept Section 8 tenants to incentivize participation in the Section 8 program. The balance of the $2 million program is paid for with annual program fee that is assessed on landlords (who are permitted to pass up to ½ of the cost of the fee to their tenant(s)). The payments to the Housing Authority are based on the services provided. Any unused program fees will be maintained and used to support future year costs. Finance Department staff who support the collection of fees are paid through the rent program.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The Agreement provides administrative services consistent with the Rent Ordinance and its implementing regulations.
ENVIRONMENTAL REVIEW
Approval of this Agreement is exempt from review under the California Environmental Quality Act (CEQA) pursuant to the following, each a separate and independent basis: CEQA Guidelines, Section 15378 (not a project) and Section 15061(b)(3) (no significant environmental impact).
CLIMATE IMPACTS
There are no climate impacts to adopting this service agreement.
RECOMMENDATION
Approve a three-year Staffing Services Agreement between the City of Alameda and the Housing Authority of the City of Alameda for $1,294,970 for Fiscal Year 2020-21, $1,376,529 for Fiscal Year 2021-22, and $1,471,870 for Fiscal Year 2022-23 to administer the Rent Control Ordinance (Ordinance No. 3250) and implementing regulations for the City of Alameda’s Rent Program.
CITY MANAGER RECOMMENDATION
The City Manager recommends approval.
Respectfully submitted,
Debbie Potter, Community Development Director
Financial Impact section reviewed,
Nancy Bronstein, Interim Finance Director/Human Resources Director
Exhibit:
1. Services Agreement
Cc: Eric Levitt, City Manager