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Anaheim, CA 92805
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CITY COUNCIL AGENDA REPORT
City of Anaheim
HOUSING & COMMUNITY DEVELOPMENT
DEPARTMENT
DATE: JULY 14, 2026
FROM: HOUSING & COMMUNITY DEVELOPMENT DEPARTMENT
SUBJECT: WAIVE COUNCIL POLICY 4.1 AND APPROVE PROFESSIONAL
SERVICE AGREEMENTS WITH JOHN SOTTEK DBA HOUSING
PROGRAMS FOR RESIDENTIAL REHABILITATION
ADMINISTRATION SERVICES AND SECURITY LAND AND
RIGHT OF WAY SERVICES, INC. FOR ESCROW TRUST
ACCOUNT SERVICES
ATTACHMENT (Y/N): YES ITEM # 09
GOVERNMENT CODE § 84308 APPLIES: YES
RECOMMENDATION:
That the City Council:
1. Waive Council Policy 4.1 and approve substantially in the form attached a Professional Services Agreement with John Sottek dba Housing Programs for Residential Rehabilitation Program administration services in the amount of $50,000 for an initial one-year term from July 1, 2026 through June 30, 2027, with three additional one-year renewal options, for a total maximum compensation amount not to exceed $200,000;
2. Waive Council Policy 4.1 and approve substantially in the form attached a Professional Services Agreement with Security Land and Right of Way Services, Inc. for escrow trust account services supporting the Residential Rehabilitation Program in the amount of $10,000 for an initial one-year term from July 1, 2026 through June 30, 2027, with three additional one-year renewal options, for a total maximum compensation amount not to exceed $40,000; and
3. Authorize the Director of Housing and Community Development, or designee, to execute the agreements and related documents necessary to implement, fund, and administer the agreements, and authorize de minimis changes that do not substantially change the terms and conditions of the agreements, as determined by the City Attorney’s Office.
BACKGROUND:
The City administers a federally funded Residential Rehabilitation Program (RRP) through the Community Development Block Grant (CDBG) Program. The program Professional Services Agreements – Programs for Residential Rehabilitation July 14, 2026
preserves Anaheim's existing affordable housing stock by providing financial assistance to eligible low-income homeowners for health and safety improvements, accessibility modifications, code compliance, and other eligible rehabilitation activities.
Administration of the program requires specialized knowledge of HUD regulations, environmental review requirements, income eligibility, construction oversight, loan documentation, labor standards, and long-term compliance.
For many years, Habitat for Humanity of Orange County served as the City's program partner.
Following Habitat's departure in 2025, the City undertook a comprehensive review and modernization of the program, updating policies, procedures, legal documents, underwriting standards, application materials, and customer processes. In October 2025, the City Council approved the revised Residential Rehabilitation Program policies and authorized an initial sole- source agreement with John Sottek dba Housing Programs to assist with implementation of the redesigned program and processing of existing applicants.
The revised program also changed the method for administering construction payments. Rather than relying on a nonprofit intermediary, homeowners now select qualified contractors and payments are made through an escrow trust account, providing stronger financial controls while ensuring timely payment to contractors.
DISCUSSION:
The Residential Rehabilitation Program is highly specialized and subject to extensive federal requirements. Successful implementation requires technical expertise that is not available through traditional consulting services. Continuity is especially important following the City's recent program redesign because changing administrators at this stage would require transition of files, procedures, and compliance systems, delaying assistance to eligible homeowners.
John Sottek dba Housing Programs specializes in CDBG-funded rehabilitation programs and has extensive experience administering similar programs for numerous Southern California jurisdictions. Since beginning work with Anaheim, Housing Programs has assisted staff with implementation of the revised program, application review, and compliance with HUD requirements. Staff recommends continuing these services to preserve institutional knowledge, ensure consistent program administration, and avoid unnecessary disruption.
The revised Residential Rehabilitation Program also relies upon an escrow trust account to facilitate contractor payments. This process aligns with HUD’s expectations for reimbursements for rehabilitation work while ensuring that small contractors receive prompt payment for completed work. Security Land and Right of Way Services, Inc. currently administers trust accounts for the Anaheim Housing Authority and possesses the systems, internal controls, and experience necessary to perform these services efficiently. Utilizing an existing, experienced escrow administrator reduces implementation risk and avoids establishing a separate trust administration process.
Although Council Policy 4.1 generally encourages competitive procurement, staff recommends a waiver because these services are highly specialized, continuity of administration is critical following implementation of the revised program, and changing providers would delay homeowner assistance and increase administrative risk without providing a corresponding Professional Services Agreements – Programs for Residential Rehabilitation July 14, 2026
public benefit.
Funding for these agreements is included within the CDBG program budget identified in the FY 2026-2027 Annual Action Plan presented under a companion agenda item. Approval of the Annual Action Plan establishes the federal funding available for program administration, while approval of this item authorizes procurement of the professional services necessary to implement those activities.
These actions support the City’s Strategic Plan Goal B: Enhance Livability, Strategy 2: Develop strategies to stabilize and expand affordable, workforce, and home ownership housing options for low-income residents.
IMPACT ON BUDGET:
Funding for both agreements is provided entirely through Community Development Block Grant program funds included in the FY 2026-2027 Annual Action Plan. There is no impact on the City's General Fund.
Respectfully submitted,
Grace Ruiz-Stepter
Director of Housing & Community Development
Attachments:
1. Professional Services Agreement by and between the City of Anaheim and John Sottek
2. Professional Services Agreement by and between the City of Anaheim and Security Land & Right of Way Services, Inc.