City Council Meeting: June 14, 2011
Agenda Item: 3-V
To: Mayor and City Council
From: Andy Agle, Director of Housing and Economic Development
Subject: Prevailing Wage Monitoring Contract for Affordable Housing Construction
Staff recommends that the City Council authorize the City Manager to negotiate and execute a third modification to Professional Services Agreement #9052 in the amount of $120,000 with Comprehensive Housing Services, Inc., (CHS), a California-based company, to provide federal/state prevailing wage monitoring and Section 3 compliance for City-funded affordable housing developments from July 1, 2011 through June 30, 2012. This modification will result in a new, three year and one month total contract with CHS for prevailing wage monitoring in the amount of $295,000.
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 amend and increase the existing contract with Comprehensive Housing Services to provide these services. This action will increase the current contract from $175,000 to $295,000.
In April 2009, Council approved the existing prevailing wage contract with Comprehensive Housing Services. These contract funds for monitoring construction of affordable housing are almost exhausted and staff anticipates fully expending the existing funds within the next month. Additional funds in the amount of $120,000 will allow the continued prevailing wage monitoring for approximately another year.
During FY 2011-12, nine affordable housing developments are expected to be under construction in Santa Monica. These developments are funded with various local, state and federal monies that require the payment of prevailing wages and, to the greatest extent feasible, provide opportunities for job training and employment to lower income and minority residents. The applicable regulations are: City of Santa Monica Municipal Code Section 7.28.030, the California Labor Code, Section 1770, et. seq., the federal Davis-Bacon Act and Section 3 of the Housing and Urban Development Act of 1968.
Potential ramifications for non-compliance of prevailing wage monitoring and Section 3 compliance include fines, requiring the City to fund payroll underpayment, and withdrawal of project funding. To mitigate these risks on affordable housing projects, the City contracts with firms who specialize in prevailing wage monitoring and Section 3 compliance.
In March 2011, staff issued a Request for Proposals (RFP) for prevailing wage and Section 3 monitoring services. Five responses were received. Staff reviewed and evaluated the proposals based on criteria including firm staffing, experience, qualifications, technical skills, fee schedule and references. The HED staff committee determined that CHS was the most qualified applicant. CHS bid at the lowest rate (as did one other proposal), demonstrated expertise in the field and provided excellent references. Since CHS already has an existing contract with the City, this report requests that City Council authorize the City Manager to amend and increase the existing professional service agreement with CHS to a total of $295,000 for the purpose of prevailing wage and Section 3 monitoring.
The additional contract amount to be awarded to CHS is $120,000 and funds are available for this purpose in 01264.555060 sub ledger 76027W.